Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — SCOTLAND

Caithness and Sutherland (Economy)

Mr. Maclennan: To ask the Secretary of State for Scotland whether he has received the commissioned reports on the economy of Caithness and Sutherland; and if he will make a statement.

The Minister of State, Scottish Office (Mr. Ian Lang): I have received the report by PIEDA—Planning, Industrial and Economic Development Advisers—on prospects for the Caithness economy. The report will be published by the Highlands and Islands Development Board next week.

Mr. Maclennan: As the severe economic disruption faced by Caithness and Sutherland is the direct result of the Government's decision last July, in which the Secretary of State for Scotland participated directly, does the Minister accept that the Scottish Office has a particular responsibility to identify and promote suitable Government office relocation in Caithness, which has shown itself to be suitable through the Atomic Energy Authority superannuation office? When does the Minister hope to announce special investment measures to offset the economic losses that have resulted from the Government's decision? Will he also recognise that that is needed to help the infrastructure and local efforts—[Interruption.]

Mr. Speaker: Order. Before the Minister answers, may I ask for brief questions as we are making very slow progress?

Mr. Lang: The Government certainly accept our responsibility to help the economy of the area to flourish. The closure of the fast reactor has been delayed until 1994 and that will enable measures to be taken. The hon. Gentleman will know that the HIDB, with a very substantial budget of more than £45 million, has set up a local project team and the Caithness steering group is looking at the area to see what can be done to assist the economy to recover and to flourish generally, as it is doing.

Mr. Dewar: Does the Minister accept that the Nirex proposals for a nuclear waste deep depository will provide no answer to the economic problems which might result from the phasing out of Dounreay? Will he note that the Labour party and the vast majority of Scots are implacably opposed to such a development by Nirex in Caithness?

Mr. Lang: I note the hon. Gentleman's and the Labour party's position. Nirex has proposed the Dounreay site as a possible area for geological investigation partly because there is a measure of local support in that area. If it were to go ahead, a number of jobs would certainly be created locally. However, the matter will proceed through the normal planning application procedure, as one would expect.

Mr. Salmond: The Nirex proposal for nuclear dumping is fiercely resisted throughout Scotland. If it is dependent on the measure of local support, will the Minister of State give a commitment that the Government will abide by the results of a local referendum on the proposal?

Mr. Lang: I can give the hon. Gentleman no such assurance. There are well tried and tested planning procedures which I am sure will be appropriate.

Council Properties

Mr. Nicholas Bennett: To ask the Secretary of State for Scotland if he will make a statement on the sale of council properties and any further measures he proposes to introduce to encourage tenants to buy their council properties.

The Secretary of State for Scotland (Mr. Malcolm Rifkind): Since April 1979 nearly 150,000 public sector houses in Scotland have been sold to sitting tenants. The Government keep under review the possibility of improving the opportunities for tenants to own their own homes.

Mr. Bennett: I welcome the increase in the number of owner-occupied houses in Scotland, but does my right hon. and learned Friend agree that the fact that only 44 per cent. of the population of Scotland own their own homes means that fewer people in Scotland have real financial independence? Will he do all that he can to increase the level to that in England and Wales?

Mr. Rifkind: The proportion in Scotland has increased from 31 per cent. to about 44 per cent. I am pleased to say that the level of interest in acquiring public sector homes is higher than ever, so Scotland is likely to approach a level comparable with the rest of the United Kingdom and other parts of western Europe in the not too distant future.

Mr. Lambie: If the right hon. and learned Gentleman really wishes to encourage tenants to purchase council property, why does he not take the advice of the Adam Smith Institute and increase the percentage rebate from 70 per cent. to 100 per cent?

Mr. Rifkind: I am as fascinated as I am sure the Adam Smith Institute will be to welcome the hon. Gentleman as a recruit to its cause. I sometimes find myself unable to be as enthusiastic as the hon. Gentleman clearly is about giving tenants extra rights to purchase their homes, which makes me slightly embarrassed about my position. In all seriousness, a concept of 100 per cent. rebates, which in practice means giving the houses away, has certain fundamental objections. Home ownership should be not only a right but a responsibility. [HON. MEMBERS: "Ah!"] It has never been part of the Government's objective to impose home ownership upon those who could not afford to maintain their homes. The fact that many tenants make


no contribution to their rent due to housing benefit should be taken into account. If the hon. Gentleman is arguing otherwise, I may have to think again.

Mr. Ernie Ross: What concern does the Secretary of State feel about the spate of panic buying that has broken out as a result of the changes in the forms of tenancy for council tenants—the "pick a landlord" scheme? Is he not concerned that many council house tenants are taking on a burden that they will be unable to bear in future, particularly with the massive increase in mortgage interest rates for which his Government are responsible?

Mr. Rifkind: By its irresponsible scaremongering, the Labour party has been partly responsible for the tremendous boost in applications to buy public sector houses.

Mr. Marlow: Would there not be some advantage in these matters being decided totally in Scotland in accordance with an amended version of the Scotland Bill proposed by Opposition Members—the amendment being that if Scotland were to decide its own housing policy, we would need no Scottish Members in this House to decide housing policy in England?

Mr. Rifkind: That is as may be, though some of us might not agree with my hon. Friend. This is proving to be a fascinating day. My hon. Friend the Member for Northampton, North (Mr. Marlow) is apparently in favour of Scotland's independence while the hon. Member for Cunninghame, South (Mr. Lambie) seems to be in favour of council house sales.

Geriatric Unit (Rutherglen)

Mr. McAvoy: To ask the Secretary of State for Scotland when the building of the geriatric unit at Ruthrglen will start; and how long it is expected take.

The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Forsyth): This project has been held in abeyance by Greater Glasgow health board pending the outcome of its current strategy review of services for the elderly. I understand that the review is due to be completed within two months. Thereafter it will be considered by the board's policy and planning committee before a consultative document is issued.

Mr. McAvoy: I thank the Minister for his answer. He will recall that some time ago he gave me an assurance that the health board had said that it expected the review to be completed by spring this year. The Minister has now announced that the health board intends to delay for a further two months. Will he ensure that the health board completes the review and starts the process of building the unit in Rutherglen? The Minister understands the circumstances and appreciates the fact that all those living in Cambuslang and half of Rutherglen within my constituency have to go to Lanarkshire health board for geriatric services. That is intolerable and there should be no delay in attacking such circumstances.

Mr. Forsyth: I agree with the hon. Gentleman that the position in his constituency is unacceptable. He has a reasonable basis for complaint about the delays experienced and I am happy to give the undertaking that he seeks.

Mr. Foulkes: Does the Minister agree that an extra reason for pressing ahead with the geriatric unit in Rutherglen is to reduce the unplanned growth of nursing homes in Ayrshire? Is he aware that that is resulting in the migration of elderly people to those nursing homes and is contrary to all the best policy put forward by the Health Service, Age Concern and other organisations which believe that old people should be cared for in institutions, sheltered housing and other such facilities near their own homes? The unplanned growth of nursing homes in Ayrshire means that many buildings which were previously hotels are being—[HON. MEMBERS: "Give way."] There seems to be some barracking. I am having trouble with my own side.

Mr. Speaker: Order. I hope that the hon. Gentleman will try not to have any trouble with me and will be brief, please.

Mr. Foulkes: I will do my best, Mr. Speaker. Many of the buildings were previously hotels. That is undermining the position of the tourist industry in Ayrshire and we are ending up—

Mr. Speaker: Order. The hon. Gentleman has had a jolly good go.

Mr. Foulkes: We are ending up with a Costa Geriatrica which is wholly unwanted in our county.

Mr. Forsyth: I do not share the hon. Gentleman's prejudice against private nursing homes. They are able to attract people to Ayrshire because that is where people want to go. Conservative Members believe that facilities should reflect the priorities of patients, not of planners. In reply to the hon. Gentleman's recommendation about matters in Rutherglen, I must say that if the private sector is able to play a role in meeting needs there, I would be the first to welcome that.

Channel Tunnel (Job Prospects)

Mr. Tom Clarke: To ask the Secretary of State for Scotland when he next expects to meet the Scottish Development Agency to discuss job prospects for Scotland arising from the Channel tunnel project.

Mr. Rifkind: I will be meeting the agency board on 22 May to discuss a range of issues of mutual interest. If the agency wishes to discuss job prospects arising from the Channel tunnel at this meeting, or otherwise, I shall be glad to do so.

Mr. Clarke: Does the Secretary of State agree that if Scots are to experience a fair share of the jobs which may be available from 1992 and the Channel tunnel, investment in rail and road is absolutely essential? In particular, does he agree with the Freightliner working party about the enormous potential of the Coatbridge-Gartcosh location for the superfreight terminal, provided that there is adequate infrastructure—including a new junction from the M73 motorway—to make the project a success?

Mr. Rifkind: I am interested by what the hon. Gentleman says. British Rail is already considering sites, including Gartcosh, as part of the Channel Tunnel Act 1987 section 40 consultations and its plans will be published towards the end of this year. On roads, the Government are committed to improving the A74 to


motorway standard. That will make a crucial difference because it will integrate Scotland's motorway network with that of the rest of the United Kingdom.

Sir Russell Johnston: Does the Secretary of State agree that it would be in his own interests to respond positively to the question that has just been addressed to him and that if he did it might increase the number of Scottish Back Bench Tory Members present from one?

Mr. Rifkind: I am not certain of the relevance of the hon. Gentleman's question. Scottish Conservative Members have a considerably better voting record in the House than the hon. Gentleman or his hon. Friends.

Mr. Stern: Does my right hon. and learned Friend agree that there will be no job prospects in Scotland from the Channel tunnel so long as the railway unions are unable to control their old-fashioned Socialist members, as was the case on the London Underground this morning?

Mr. Rifkind: The encouraging sign for job prospects is that Scottish companies have already been extremely successful. More than 20 Scottish companies have been successful in winning contracts for the Channel tunnel, which represents orders of £65 million and 14 per cent. of all orders so far. Clearly, Scottish companies have been doing well in winning such a high proportion of overall orders in open competition.

Mr. Wilson: Does the Secretary of State recognise that there will be considerable disappointment at the blandness of his replies to the pertinent questions asked by my hon. Friends? Can he give any indication of Scottish Office involvement in planning for the Channel tunnel, including the crucial questions about the routes to be followed by rail links in the south? Is it not time that the Scottish Office broke its slumber on this and showed some recognition of the potentially enormous adverse consequences if there are not fast, direct links between the tunnel and Scotland?

Mr. Rifkind: For once, the hon. Gentleman seems to have written his supplementary questions before hearing the exchanges. He referred to the way in which I responded to questions from his hon. Friends, but there has been only one such question and I responded positively to it. We attach great importance to the link with the Channel tunnel being suitable for the requirements of Scotland and other parts of the United Kingdom. My hon. Friends and I have had several meetings with the chairman and other officials of British Rail and we are in close contact not only with British Rail but with the Department of Transport. I entirely endorse the view that it is crucial that the opportunities offered by the Channel tunnel should be available not just in the south of England, but to the rest of England, Scotland, Wales and the United Kingdom as a whole.

Council House Sales

Mr. Knox: To ask the Secretary of State for Scotland how many council houses have been sold to sitting tenants in Scotland since May 1979.

Lord James Douglas-Hamilton: Since April 1979 nearly 150,000 public sector houses in Scotland have been sold to sitting tenants. Included in that figure are more than 102,000 sales by local authorities.

Mr. Knox: What percentage of the council housing stock in Scotland has been sold to sitting tenants and if that figure is still significantly below that for England, what steps is my hon. Friend taking to increase the number of council houses in Scotland that are sold to tenants?

Lord James Douglas-Hamilton: Approximately 14·7 per cent. of the public sector housing stock has been sold since 1979. In England the figure is 19·5 per cent., but the figures for Scotland are escalating rapidly. In the third quarter of 1988 such sales were running at about 4,150 per month, which is 43 per cent. higher than the figures for the corresponding quarter of 1987. My hon. Friend will be encouraged to hear that the demand is constantly growing.

Mr. Ingram: If a private landlord takes over public sector housing stock and resells it to another private landlord, will sitting tenants retain the right to buy?

Lord James Douglas-Hamilton: It depends whether the hon. Gentleman is asking about tenants' choice or voluntary disposal. With voluntary disposals, a sitting tenant has the right to buy.

Mrs. Ray Michie: For those tenants who do not choose to buy their own house, wall Scottish Homes guarantee their rights if they choose a new landlord and that landlord does not carry out his managerial responsibilities?

Lord James Douglas-Hamilton: Scottish Homes will certainly have a monitoring role which I expect it to take seriously.

Dr. Reid: Instead of striding to the Dispatch Box to boast about the number of council houses that he has sold off, would not the Minister do better to give us an abject apology for his shameful record on building them in the first place? Why does the Minister think that we have 30,000 homeless families in Scotland? Why are 192,000 families on waiting lists, on which they wait for an average of three years? Why have 40,000 families waited more than four or five years for a council house? Is it not because the Government's record shows a drop in council house building from 18,500 council houses in 1979 to 8,500 council house start-ups now? Is that not a shameful record for any Government?

Lord James Douglas-Hamilton: The hon. Gentleman anticipates the next question. His first comments were based on a fundamental misconception. I have not sold any council houses. All that the Government did was to provide a right to tenants under the Tenants' Rights, Etc. (Scotland) Act 1980 which included security of tenure. To their eternal shame, the Labour Opposition opposed that measure.

Homelessness

Mr. Nigel Griffiths: To ask the Secretary of State for Scotland what are the latest figures for homelessness in Scotland.

Lord James Douglas-Hamilton: Returns submitted by local authorities indicate that 9,000 households which applied under the homelessness legislation in 1987–88 were assessed by local authorities as being homeless. In 1986–87, the figure was 10,500.

Mr. Griffiths: Why has the Secretary of State washed his hands of homelessness, which has reached horrific


levels in Edinburgh and Scotland? If he does not do something about the problem soon, Edinburgh will get a reputation to match the worst of downtown New York.

Lord James Douglas-Hamilton: I am grateful to the hon. Gentleman for having given me notice of his supplementary question in the Edinburgh Evening News today which states:
a row blew up during Scottish Questions in the Commons.
I am sorry to disappoint the hon. Gentleman, but I must advise him that the statutory responsibility for the homeless rests with local authorities. They are under a duty to ensure that accommodation is made available for those in priority need. The code of guidance issued by the Government makes it clear that where possible local authorities should secure accommodation for homeless young people at risk of exploitation. I am sure that the city from which we both come is doing that job and is taking its responsibilities seriously.

Mr. Norman Hogg: Is the Minister aware of the reply that I received from his hon. Friend the Minister of State about the number of council houses sold in the new towns and about the impact that that is having on homelessness in the five new towns? Will the Minister undertake, with the Minister of State, to initiate an inquiry into the fact that public sector building in the new towns is inadequate to meet the needs of the homeless persons there?

Lord James Douglas-Hamilton: Research has shown that when houses are sold to tenants the vast majority of tenants continue to live in them as owners, so it does not have a marked effect on the problems of waiting lists or homelessness. We are conducting research into homelessness and waiting lists which, though related, are separate subjects. We hope that the results of research into homelessness will be ready towards the end of this year, and that those in respect of waiting lists will be ready early next year.

Mr. Maxton: Among all the self-congratulation in which the Minister and his right hon. and learned Friend the Secretary of State have been indulging today, perhaps he will take some time to answer the question that was put to him by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) and explain why homelessness in Scotland as a whole has risen by 77 per cent., in Aberdeen district council area by 200 per cent., and in Renfrew by 355 per cent. since 1983. Council house starts last June were only 11 per cent. of what they were in 1979 and mortgage repossessions in Scotland have risen by a staggering 686 per cent. since 1980. How does the Minister justify that in terms of the Government's housing policy in Scotland?

Lord James Douglas-Hamilton: If the hon. Gentleman wants to know the reasons for homelessness, there are a vast variety of them, including marital break-up, the incidence of single-parent families, and the many young people who leave home at an early stage. We have greatly increased resources to local authorities in Scotland this year. Their housing revenue account is no less than £474 million gross, which is £29 million more than it was last year, and 6·5 per cent. up on last year's figures. That will undoubtedly be of assistance to local authorities.

National Health Service

Mr. David Marshall: To ask the Secretary of State for Scotland what representations he has had from general practitioners in Scotland about the Government's plans to restructure the National Health Service.

Mr. Michael Forsyth: Following the publication of the Government's White Papers, "Promoting Better Health" and "Working For Patients—Caring for the 1990s", I wrote to all general medical practitioners in Scotland on 16 March asking for their views on a new contract. Those views are currently being received and studied.

Mr. Marshall: Is the Minister aware of the great health problems in the east end of Glasgow, with its high numbers of sick, poor, unemployed and elderly people? GPs there have worked hard for years to reduce the size of their lists. Why is the Minister forcing GPs back into the bad old days? Why is he forcing GPs to provide the cheapest treatment rather than the best treatment for patients? Can he guarantee that that will not happen and that he will alter his proposals accordingly?

Mr. Forsyth: I am happy to give the hon. Gentleman the guarantee that he seeks. It is certainly no part of our policy or of our proposals that the standards of primary care and service offered by general practitioners should in any way be reduced. There is much in our proposals to which doctors in inner-city areas, particularly deprived areas, should look forward with optimism. Doctors who continue to have the same list size but offer additional services concerned with preventive medicine, day surgery, and so on, will be able to maintain and enhance their incomes.

Mrs. Margaret Ewing: No doubt the Minister would find it embarrassing to give even an initial assessment of the negative responses that he has received. Members of Parliament are receiving copies of letters that were sent by GPs. I have not received one letter from GPs in my area showing broad support for the Government's proposals. Does the Minister accept that the general thrust of the GPs' responses shows that they predict a reversal of 40 years of service by the emphasis on capitation lists? It will be particularly difficult for women doctors, who are often employed on a part-time basis and have an important role to play in preventive medicine. Will the Minister give a commitment that he will not follow the Secretary of State for Health's example but will try to take the medical profession with him on any changes that are implemented?

Mr. Forsyth: With regard to the proposals to make the Health Service more responsive to the needs of the patients, the provisions in Scotland will be exactly the same as elsewhere in the United Kingdom. We have already given an undertaking that the contract for general practitioners will reflect the particular circumstances in Scotland. It is slightly surprising to find a Scottish nationalist Member arguing that the contract proposed for England will apply in Scotland. We hope to make an announcement shortly on our proposals for general practitioners in Scotland.

Mr. McKelvey: Does the Secretary of State agree that to date at least 191 medical practitioners in Ayrshire alone have written to him indicating their complete opposition to the plans in the White Paper "Working for Patients"? They state categorically that, instead of working for


patients, it will work against patients and that it is the beginning of the end of the National Health Service as we know it in Scotland.

Mr. Forsyth: I find it difficult to understand how the hon. Gentleman can argue that changes in the doctors' contract and in the method of delivery of service within the National Health Service that will result in an attack on waiting lists, in doctors being encouraged to give more emphasis to preventive medicine and to provide wider services should be seen as an attack on the National Health Service. Proposals that enable patients to change their doctor more easily or to ensure that their doctor is available to visit them at weekends and at night will be widely welcomed by patients and most doctors. The hon. Gentleman is right to say that doctors have expressed alarm, but doctors in Scotland would be wise to wait to see what is on offer before criticising proposals that they have not yet seen.

Mr. Galbraith: The problem is that doctors are aware of some of the proposals and they do not like them. Is the Minister aware that I have received copies of the hundreds of letters that he has received and that not one supports his proposals? Does he agree that one of the concerns in those representations is the list size, which is particular to Scotland? Has the Minister had any success in discussions with his counterparts in England and Wales to ensure that any proposals will take into account the special considerations of the list size in Scotland? Is he aware that we will not be dragged along on the coat tail of a huge list size forced on us to the detriment of doctors, patients and the community?

Mr. Forsyth: As the hon. Gentleman will know, we have had discussions with the Scottish General Medical Services Committee. As the doctors are organised and negotiate on a United Kingdom basis, they are not able to discuss the particular position in Scotland, but the Scottish Office and Ministers have been addressing that problem. The hon. Gentleman is mistaken about the letters that I have received. There is widespread support among doctors—[Interruption.] Almost all doctors, whether in general practice or in hospitals, support our proposals for medical audit and for putting more emphasis on preventive medicine. The hon. Gentleman said that there was no support at all. As usual, he is using simplistic slogans to attack a policy, when he and his party have no alternative other than to commit themselves to undo everything that the Government achieve.

Mr. Steel: Is the Minister aware that the general practitioners in my part of Scotland have written to him opposing those parts of the proposals that relate to general practice? They especially object to his blandishments to increase list sizes to the point where there would need to be group practices covering more than one town and thereby cutting the essential link between a community and its general practice. Will the Minister reconsider that proposal?

Mr. Forsyth: I had a very useful and helpful meeting with a number of doctors in the right hon. Gentleman's constituency, who welcomed the broad thrust of the proposals.—[Interruption.] Yes, they did. They expressed reservations about certain aspects of the contract that are currently under discussion. I do not believe that it is right for Opposition Members, who have obviously made no

attempt to study the details of the proposals, to argue that there is not considerable agreement with what we are seeking to achieve. However, there is certainly argument about whether the methods that we are using are the most appropriate. That is why we have issued working papers and have entered into discussions with the medical profession.

Schools (Opting Out)

Mr. Macdonald: To ask the Secretary of State for Scotland what representations he has received concerning schools opting out in Scotland.

Mr. Rifkind: As at 4 April 85 representations had been received on the descriptive paper "Self-Governing Schools", which we published in December 1988. These have been made available on a public file.

Mr. Macdonald: Does the Secretary of State agree that one of the major objections to the concept of opt-out schools has come from parents and from groups who are concerned that such schools will no longer cater for children with special educational needs? Does he acknowledge the grounds for such concern and will he undertake, before the opting-out Bill leaves this House, to come forward with amendments that will ensure that opt-out schools will be unable, at any time in the future, to shift the responsibility for such children?

Mr. Rifkind: We all agree that schools that provide for special needs have a particular role in the community. The hon. Gentleman will be aware that my hon. Friend the Under-Secretary of State, my hon. Friend the Member for Stirling (Mr. Forsyth) has given assurances in Committee with regard to those schools that provide for special needs.

Mr. Allan Stewart: In the past there has been a great deal of interest in the question of Catholic single-sex schools. Does my right hon. and learned Friend agree that, recently, there have been positive expressions of interest from the Church of Scotland and from the Islamic community about using the new legislation? Would my right hon. and learned Friend or my hon. Friend the Minister be favourably disposed in principle, to a meeting with some of those interested at an appropriate time? On an equally positive note will my right hon. and learned Friend congratulate the Labour party on its recent conversion to the principle of parental majority?

Mr. Rifkind: I am always happy to congratulate the Labour party though, sadly, such occasions do not arise very often.
The basic principle to which the Government attach importance is the need to respond to the wishes of parents in the community and the right of parents to influence the kind of education that their children receive. That is a fundamental aspect of any democratic society and it is on that basis that we respond to initiatives that are occasionally brought before us.

Mr. McLeish: Is the Secretary of State aware of the comments by Mrs. Julie Collis of the Scottish Parent Teachers Council who said, in a recent edition of The Times Educational Supplement that the Government's handling of the Self-Governing Schools Etc. (Scotland) Bill had left parents breathless and that she found it


disgusting? Why is it that an organisation funded by the Government should feel so aggrieved about a major piece of legislation?

Mr. Rifkind: I read that extract from The Times Educational Supplement. I think that Mrs. Collis was concerned as to the pace of the consideration of the Bill in Committee. At the moment we are on clause 7 of the Bill, but according to the hon. Gentleman's press release issued earlier today, it appears that it is the desire of the Labour party that we should be on clauses 13 and 14 shortly. It looks as though the Labour party is anxious to make even quicker progress on this Bill than we are.

Development Agency

Mr. Andrew Welsh: To ask the Secretary of State for Scotland when he next intends to meet representatives of the Scottish Development Agency; and what matters he proposes to discuss.

Mr. Lang: I refer the hon. Gentleman to the answer that my right hon. and learned Friend gave a few moments ago to the hon. Member for Monklands, West (Mr. Clarke).

Mr. Welsh: Whatever organisational structures are chosen for Scottish Enterprise, will the Minister assure us that its strategic investment role will neither be diminished nor diluted? In the meantime, is it true that the Scottish Development Agency has lost between 15 and 20 per cent. of its staff and that the uncertainty regarding its future is causing a loss of morale and a loss of staff? That is bad for Scotland. When will the Minister take action on those matters?

Mr. Lang: We have given consideration to such matters as the strategic investment role of the Scottish Development Agency in the context of the submissions that we have received during the consultation period on Scottish Enterprise. Whatever the staff of the SDA may be doing in some parts of Scotland, they must be extremely busy in the hon. Gentleman's constituency because they have to consider the Arbroath project, the Carnoustie golf-related initiatives, the Perth area partnership, work in Brechin converting the Denburn works, the north Angus economic review and the Dundee waterfront project.

Mr. Robert Hughes: As the Secretary of State accepts the great importance of communications so that different parts of Scotland can benefit from the Channel tunnel, will he join me in deploring British Rail's resistance to the electrification of the east coast line between Aberdeen and Edinburgh? Will he encourage his right hon. and learned Friend the Secretary of State to put as much pressure on British Rail about this as did the Prime Minister about Kent, to make it change its mind as fast as possible?

Mr. Lang: That must be a commercial decision for British Rail, although I note the interest and concern felt in that part of Scotland about this matter. This is not a matter for the Scottish Development Agency.

Mr. Andy Stewart: Will my hon. Friend join me in welcoming the two recent reports which lavished praise on the Scottish economy? The Westminster bank said that it was the best in the United Kingdom, and the Fraser of Allander Institute said that it was performing in line with Tory philosophy.

Mr. Lang: My hon. Friend is absolutely right. He will have seen the recent index of production and construction, which showed that in the manufacturing, production and construction sectors, the Scottish economy is performing better than the rest of the United Kingdom.

Trunk Roads

Mr. Home Robertson: To ask the Secretary of State for Scotland if he will make a statement on his Department's review of trunk roads in the south of Scotland.

Lord James Douglas-Hamilton: The study by consultants "Routes South of Edinburgh" is in its final stages. When it has been completed and fully considered, which I expect will be in the summer, I intend to make a statement both about the report's conclusions and about our proposed way ahead.

Mr. Home Robertson: I thought that the Minister was going to say that it would be published in a special edition of The Observer. In view of the fact that Ministers feel so strongly about the unity of the United Kingdom, I shall draw the Minister's attention to the missing link on the main Al road which is supposed to link Edinburgh—[Interruption.]—The hon. Member for Tayside, North (Mr. Walker) is not there either. In view of the increasing congestion on the dangerously inadequate single carriage way between Musselburgh and the English border, and onwards to Morpeth, in particular, as there were 283 injuries and 25 deaths over three years on the Scottish section of the A1, will the Minister undertake to begin the task of completing the A1 dual carriageway, both to save lives and to improve communications in Scotland and internationally?

Lord James Douglas-Hamilton: The casualty rates over the past three years which the hon. Gentleman mentioned have not been unduly high in comparison with those in other district council areas, although they are certainly a subject of grave concern. Dualling is one of the issues addressed by the "Routes South of Edinburgh" study, and accident rates on the present Al will be fully taken into account. More immediately, a major junction improvement on the Al at Haddington is planned as well as provision for crawler lanes on the Al at Pencraig Hill, which will go ahead as soon as the statutory procedures have been completed and the finance is available.

Mr. Kirkwood: Does the Minister accept the crucial importance of the "Routes South of Edinburgh" review to the border region? When the study is published, will he undertake to meet representatives from the local authorities and Members of the House from East Lothian, the Borders and north Northumberland to consider the detail of that report? Can he cast any light on a report in the Newcastle Journal this Monday that a feasibility study by the Department of Transport was under way into a motorway link between Newcastle and Edinburgh?

Lord James Douglas-Hamilton: I made inquiries this morning and understand that the Lothian and Borders regional councils may already be involved in discussions with a group from seven English counties which are investigating the feasibility of a scheme incorporating private finance. The Scottish Office looks forward to being kept in touch with any findings that emerge. With regard


to the area of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), a £7·5 million Al Tower to Dunglass diversion is planned. A bypass of Langholm on the A70 is under investigation, as well as the realignment of the carriageway from Ancrum House to Harrietfield on the A68. Therefore, a considerable amount of work is taking place.

Mr. Beggs: Can the Minister inform us whether his Department, during the review of trunk roads in the south of Scotland, has taken account of the importance to Northern Ireland hauliers of a good road service south from Cairnryan and Stranraer? Will he also bear in mind that although there are those who wish Northern Ireland to be linked with the Channel tunnel through Dublin, Dun Laoghaire and Holyhead, we in Northern Ireland wish to maintain our close Scottish links and have a proper through route through Stranraer and Cairnryan?

Lord James Douglas-Hamilton: I am certain that many hon. Members, including my hon. Friend the Minister of State, share the hon. Gentleman's concern. We see the M74 as the major roads priority of the 1990s, but after its upgrading the Euroroute to Stranraer and the A96 upgrading will be seen as equal next priorities.

Confederation of British Industry

Mr. Oppenheim: To ask the Secretary of State for Scotland when he last met the Confederation of British Industry, Scotland; and what matters were discussed.

Mr. Rifkind: I am in frequent touch with the Confederation of British Industry in Scotland on a range of matters affecting the Scottish economy. I look forward to a continuing exchange of views.

Mr. Oppenheim: Next time my right hon. and learned Friend meets the members of the CBI, will he discuss with them the excellent news of Rolls-Royce's recent substantial orders for aero engines to be put into Boeing and Airbus airlines? Is he aware that much of the work will be placed in Scottish factories? Does that not typify the increasingly bright outlook for the Scottish economy, which includes increased manufacturing output, manufacturing productivity and manufacturing employment but which seems to make Opposition Members extremely glum?

Mr. Rifkind: It is indeed extremely encouraging that Scottish industry is continuing to be so bullish in its order books, its exports and its expectations for further growth and employment. It is particularly welcome that the level of interest rates appears to be having even less effect in retarding the Scottish economy than in retarding the economy elsewhere in the United Kingdom.

Mr. Worthington: This morning the Secretary of State met leaders of the television industry in Scotland. Will he take serious account of their fears about the future of programme making within Scotland, in view of the Government's White Paper on broadcasting? Will he get together with the CBI and the Scottish Development Agency to ensure that the great opportunity for an expansion of this valuable industry of the future is taken, rather than allowing the centralisation—which seems likely—of programme making within the south-east of England or Los Angeles?

Mr. Rifkind: I agree with the hon. Gentleman about the importance of the industry in Scotland. It is particularly encouraging that at present Scotland contains a larger proportion of independent programme producers than any other part of the United Kingdom outside London. We want broadcasting to enable future further expansion of local programme production, and we also attach importance to the cultural diversity in Scotland which is reflected in the structure of broadcasting as well as in other forms of the media.

Mr. Malcolm Bruce: Does the Secretary of State acknowledge that the advent of the single market in 1992 makes improving the infrastructure for Scottish companies crucial? When he meets members of the CBI, will he ask whether they support the campaign to ensure that the electrification of the east coast line continues to Aberdeen, and that the Aberdeen-Inverness route—the A96, the most dangerous road in Scotland—is given the upgrading that is long overdue? Only in that way will visitors to the north of Scotland be able to take full advantage of the single market.

Mr. Rifkind: We all appreciate that. It was for precisely that reason that the present Government provided a dual carriageway from Perth to Aberdeen—and, indeed, the Inverurie bypass, on the very road to which the hon. Gentleman refers, is beginning construction at this moment. We attach considerable importance to the improvement of communications. The north-east, and Aberdeen in particular, is entitled to share the economic opportunities offered by 1992 with the rest of Scotland and the United Kingdom.

Mr. Favell: How do the Scottish CBI and others interested in free enterprise in Scotland view the threat to the Union posed by the Labour party and other Opposition Members who are toying with the Scottish convention? With Socialism out of fashion in Moscow, Kiev and Leningrad, how do they view the possibility of Scotland becoming the last bastion of Socialism in Europe as the Opposition realises that they have no earthly chance in the rest of the United Kingdom?

Mr. Rifkind: My hon. Friend can take comfort from the fact that there has never been a majority in Scotland prepared to vote for Socialism. That, I think, is a point on which all parties in the House need to reflect. So far as the views of the CBI are concerned, I noticed that, only yesterday, Mr. Alistair Mair, the deputy chairman of the CBI in Scotland, indicated his belief that any break-up of the United Kingdom, or any major constitutional change, would impose new economic burdens on Scotland, which would deter investment and be contrary to our economic interests.

Childminders

Mrs. Fyfe: To ask the Secretary of State for Scotland whether he will make more funds available to the Scottish Vocational Education Council for the Training of Childminders.

Mr. Michael Forsyth: I have no plans to do so. The Government, through the rate support grant, have provided substantial resources, which have allowed local authorities to increase expenditure on services for the


under-fives from £19·5 million, in 1979·80, to £46·9 million, in 1987–88—an increase, in real terms, of 37 per cent.

Mrs. Fyfe: We all know that this Minister does not give the under-fives any priority, and, in view of what he is doing to the over-fives, that may be just as well. While we are waiting for progress on the training of childminders in sufficient quantities for people's needs, would the Minister advise working women to get together and arrange for one of them to look after the children while the rest go to work? I think that I had better warn the Minister that, in the advice that the Prime Minister gave a few months ago, she was inciting women to break the law.

Mr. Forsyth: The hon. Lady does the Government a great disservice. She should be aware that since 1979 the numbers of children attending nursery schools and classes has increased by 23 per cent. The numbers in various forms of day care have increased substantially, and almost 80 per cent. of three and four-year-olds are now the subject of pre-school provision. I had a letter the other day complaining about the two-year backlog in the registration of childminders by Strathclyde regional council, owing, I understand, to some industrial dispute. If the hon. Lady is particularly concerned about childminders, she might use her good offices with the Labour party to sort out that particular problem before coming to central Government.

Community Charge

Mr. Canavan: To ask the Secretary of State for Scotland what is his latest estimate of the number of people in Scotland who will not pay the poll tax.

Mr. Lang: We have made no estimate.

Mr. Canavan: I did not hear the Minister's reply, but what reply did the Secretary of State give to the Committee of Scottish Clearing Bankers, which has complained to him about being forced to arrest the bank accounts of customers who have refused to pay fines levied for their failure to register to pay the poll tax? Is it not clear from this, and from last Saturday's massive anti-poll tax demonstration involving about 30,000 people, that the opposition to the poll tax embraces not only the political majority in Scotland but many people from many different walks of life—people from sport, from the arts, community leaders, civic leaders, Church leaders, trade union leaders, and now, apparently, even the bankers? Is everyone out of step except our "Malcy"?

Mr. Lang: My answer to the hon. Gentleman's original question was that we had made no such estimate. So far as the other points that he raises are concerned, he chooses to forget how unpopular and how unfair domestic rates were. What we have introduced is a broader-based and fairer system of contributing to local government. If the hon. Gentleman decides to make a martyr of himself by not paying his community charge, he will be confronting not only the rule of law but the leader of his own party.

Dame Peggy Fenner: Will my hon. Friend, in order to give enormous cheer to the English local authorities, which will be embarking in the near future upon a register of people subject to the community charge, assure me that all those who marched in Scotland were part of a very small

proportion of people who did not register? Can he quote the figure that I heard him mention on the radio concerning the number of people who have registered for the community charge?

Mr. Lang: I am happy to assure my hon. Friend that about 99 per cent. of the adult population in Scotland have registered. She may also like to know that most local authorities in Scotland have assumed that at least 95 per cent. of the adult population will pay the community charge.

Mr. Douglas: Will the Minister take time to reflect on the Chancellor of the Exchequer's view that tax remission for the elderly in terms of medical aid should not be means or needs-tested? Will he compare and contrast that with the severe disclosure on which people who are mentally impaired will have to embark in order to avoid payment of the poll tax?

Mr. Lang: The hon. Gentleman draws attention to the elderly. He may like to know that we estimate that about half the pensioner population in Scotland will be eligible for rebates of one form or another and that about 90 per cent. of the single pensioner population in Scotland will benefit as a result of the change from domestic rates to the community charge.

Mr. Harris: Is my hon. Friend able to give the House any information about how many right hon. and hon. Members who sit on the Opposition Benches have made public declarations about their intention to flout the law —[Interruption]—in some cases against the specific advice of the leaders of their parties? Surely every hon. Member has a right to that information.

Mr. Lang: My hon. Friend will be aware that public declaration and private practice are often very different. However, I shall look with interest to see what action the Leader of the Opposition takes against any Opposition Front Bench Member who does not pay the community charge.

Mr. Dewar: Is the Minister not genuinely concerned about the confusion and chaos that surrounds the rebate system and about the fact that countless thousands of people have not yet lodged applications? Will he guarantee that, if necessary, the system will be altered to ensure that everyone who is genuinely entitled to a rebate will have it backdated to 1 April?

Mr. Lang: We are certainly concerned that anyone who is eligible for a rebate should get one. We calculate that about 30 per cent. of the adult population will be eligible for a rebate. Applications have been received from about two thirds of the likely number and they are being processed very quickly. I hope that the short-term problems that are being experienced by some local authorities will be resolved fairly quickly. However, the Department of Social Security has, exceptionally, granted a concession whereby, for up to 56 days from the due date, it will be possible to obtain a rebate.

Labour Statistics

Mr. Harry Ewing: To ask the Secretary of State for Scotland what was the level of unemployment in Scotland in April 1979 using the same method of calculating the figures as presently used.

Mr. Lang: In April 1979, seasonally adjusted unemployment in Scotland, on a basis consistent with the current coverage of the count, was 141,000. Since January 1987 seasonally adjusted unemployment in Scotland has fallen by over 87,000.

Mr. Ewing: Is it not true that in April 1979, using exactly the same method of calculation that the Government are using now, unemployment in Scotland was about 90,000? When does the Minister expect this deplorable Government to bring unemployment down to that kind of level?

Mr. Lang: The hon. Gentleman plainly did not listen to my answer. I gave him the figure of 141,000. I understand his anxiety that the unemployment figures when his Government left office should be reduced, because he will recall that the last Labour Government presided over a doubling of unemployment during their five years in office. This Government are now more accustomed to falling unemployment.

COSLA

Mr. McAllion: To ask the Secretary of State for Scotland when he next intends to meet representatives from the Convention of Scottish Local Authorities; and what matters will be discussed.

Mr. Rifkind: I have arranged to meet representatives of the Convention of Scottish Local Authorities on Friday 28 April to begin consultations on the revenue support grant settlement for 1990–91.

Mr. McAllion: Will the Secretary of State take that opportunity to discuss with COSLA the current round of competitive tendering and the fact that multinational companies such as Sitaclean and United Kingdom Waste have been showing an interest in picking up local authority contracts in Scotland? Will he explain to COSLA and to the rest of us how the awarding of contracts to multinational companies, whose headquarters are respectively in Paris and London, is an example of the Government devolving real power and control to the Scottish people?

Mr. Rifkind: Irrespective of whether a local authority or a company carries out the services, I presume that they will employ local people. Therefore the implications for

employment are the same, irrespective of where the employer is based. The objective of competitive tendering is to ensure a good quality of service for the local community in order that the resources available can be used to the maximum benefit of the community.

Newbattle Abbey College

Mr. Eadie: To ask the Secretary of State for Scotland if he will list the individuals and organisations he consulted before making the decision to withdraw funding from Newbattle abbey college, Dalkeith, Midlothian.

Mr. Michael Forsyth: My right hon. and learned Friend consulted the governors and the trustees before his announcement on 9 March.

Mr. Eadie: Is the hon. Gentleman aware that his answer is not strictly correct? In the meeting with my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) the Secretary of State confessed to us that the reason that he took the decision was because he was asked by the Scottish Education Department to take the decision; he never consulted anybody. Is it not deplorable that the Secretary of State is not prepared to come to the Despatch Box and defend his own decision? Will the hon. Gentleman convey to his right hon. and learned Friend that, if the argument is about finance, more time should be allowed to the college so that it can change from the present structure of financing to another?

Mr. Forsyth: My right hon. and learned Friend gave the governors of Newbattle 18 months' notice of his intention to withdraw grant. Hon. Members on the Opposition Benches were among those who argued that the local authorities and the trade unions would wish to support he college. In the event, the college governors found that they were able to get commitments of only some £30,000 from the local authorities and from trade union sources. This seems to endorse my right hon. and learned Friend's judgment that the type of education on offer at Newbattle is an anachronism and that the emphasis which we have placed on adult education, which has resulted in more than 6,000 people benefiting from adult education on a full-time basis in Scotland, is the correct way forward, compared with the 40 places on offer at Newbattle. I regret to say, therefore, that the governors looked for support and found that it was not forthcoming.

Points of Order

Mr. George Robertson: On a point of order, Mr. Speaker. May I draw to your attention, and seek your advice on, something that the Prime Minister said to the House yesterday and that has considerable implications for the House?
In reply to a question put to her by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), the Prime Minister said:
The hon. Gentleman can read for himself the report of the secretary general to the United Nations Security Council.
She went on to say:
he can also obtain for himself a copy of the Geneva protocols which were specifically agreed to by SWAPO. All those are public knowledge, and the hon. Gentleman can get them from the Library at any time.
The Prime Minister used documents yesterday to make an attack on one side in Namibia, that is, SWAPO, but the fact is that the secretary general's report to the United Nations Security Council was not publicly available yesterday when she said that it was. It was not in the House of Commons Library then and it is not in the Library now.
More seriously, the documents that she referred to as the "Geneva protocols", which led her to say in her answer,
"SWAPO committed itself to the Geneva accord under which it is required to stay north of the 16th parallel in Angola"—[Official Report, 4 April 1989; Vol. 150, c. 15.], are not available. In The Guardian today, Cedric Thornberry, the assistant to the United Nations' special representative in Namibia, is quoted as saying:
We have no official knowledge of that treaty and so far as I know it has never been published".
Yesterday the Prime Minister was fresh back from Namibia and chose to make a one-sided and partisan attack on SWAPO in a brief reply to a question without making the proper and full statement that the House expected. She did so by citing documents which were not, and in one case cannot be, in the public domain or in the House of Commons Library. This is an inexcusable way of treating the House.
In the face of escalating violence and deaths on Namibia's northern border, there is real concern in this country about the possible collapse of the peace plan, the danger of further killing which may well threaten British troops—

Mr. Speaker: Order. This is not a statement; the hon. Gentleman is raising a point of order with me.[Interruption.] Order. I am not responsible for what has been said by the Prime Minister. I will hear the rest of the point of order as long as it is brief.

Mr. Robertson: I am putting to you, Mr. Speaker, the very serious point that on a matter of acute importance to the House, to the country and to British troops serving in Namibia, the Prime Minister cited the existence of extremely important documents, telling us that they were in the House of Commons Library and were publicly available. The fact that they are not publicly available and are still not in the Library must be of genuine concern to all of us and to you.
The House expected the Prime Minister yesterday to come forward with at least some support for the United Nations secretary general in his efforts in Namibia and also possibly support for a British plan on the same lines

as were applicable in Zimbabwe. However, we were faced only with partisan invective. As the Prime Minister cited documents that she said were available and were not, and that are important but are not in the public domain, will you, Mr. Speaker, seek to protect the House from such conduct and perhaps ask the Prime Minister for an explanation?

Mr. Speaker: I am not responsible for what is said at Question Time.

The Lord President of the Council and Leader of the House of Commons (Mr. John Wakeham): The hon. Gentleman went rather wide of the point of order. I have Hansard in front of me. My right hon. Friend the Prime Minister answered a question from my hon. Friend the Member for Skipton and Ripon (Mr. Curry), that was the principal answer. It was only in answer to a supplementary question that she referred to some documents. I understand that she was not correct in what she said and that the documents were not in the Library. I understand that arrangements are being made for copies of the agreement and the Geneva protocols to be placed in the Library this afternoon. It was a genuine mistake on the part of my right hon. Friend. I apologise to the House for any inconvenience that has occurred, but I understand that the documents will be put in the Library this afternoon.

Mr. Alan Williams: Further to that point of order, Mr. Speaker—

Mr. Speaker: Order. I do not see how it can be a point of order to me. The Leader of the House has made a comment about the matter, but I will hear the right hon. Gentleman.

Mr. Williams: We have observed the increasing practice of the Prime Minister, in the middle of Prime Minister's questions, of making limited statements on which there can be no further questions, so using up valuable time. When the Prime Minister makes a mistake, why should she not observe the same rules as the rest of us? Instead of sending a messenger along to say, "Please, I am sorry, but as I am Prime Minister you will ignore it," why on earth does not the right hon. Lady have the guts to come here herself to say that she was wrong and that she misled the House?

Mr. Jeff Rooker: On a point of order, Mr. Speaker. It is a different point of order on which I ask for your ruling. I will be brief. The point of order relates to your ruling yesterday in respect of the sub judice rule as it affects the Department of Trade and Industry report on the House of Fraser. I should like you to confirm that, although the sub judice rule applies during our deliberations at Question Time and on statements, it does not apply when the House of Commons or the other House is discussing legislation. When we are discussing the passage of Bills, where it is relevant, the sub judice rule does not apply. I seek your confirmation and guidance on that.

Mr. Speaker: I do not know about the other House, but I can confirm that that is so in this House.

Mr. Neil Hamilton: Further to the first point of order, Mr. Speaker. I did not catch everything that the hon. Member for Hamilton (Mr. Robertson) said, but it sounded to me very much—

Mr. Speaker: Order. I do not think that there is anything that I can add to what the Leader of the House said.

Mr. Hamilton: rose—

Mr. Speaker: In equity, I will hear the hon. Gentleman, but it must be a point of order for me to answer.

Mr. Hamilton: It sounded very much as though the Labour party is supporting the bunch of terrorists that is trying to sabotage the independence of Namibia.

Mr. Speaker: I think that we are off on an extension of Question Time.

Mr. Alex Salmond: On a point of order Mr. Speaker. In the list of amendments to the Electricity Bill, amendment No. 169 has been incorrectly recorded as standing in my name—

Mr. Speaker: We shall deal with that when we come to the Bill.

Mr. Robert Hughes: Further to the earlier point of order, Mr. Speaker, about the Prime Minister's answer yesterday. I am grateful to the Leader of the House for apologising for part of the mistake. Is he aware that there were further misleading statements? The Prime Minister said clearly that there was no provision for SWAPO bases inside the country. There are published documents that state the contrary. It is up to you, Mr. Speaker. on a matter as grave as this, with such tremendous issues at stake, to ensure that the Prime Minister, who returned from Namibia only two or three days ago, is compelled to come to the House and make a statement to withdraw the totally wrong allegations that she made against SWAPO.

Mr. Speaker: The House knows that I cannot be held responsible for what is said from the Dispatch Box or from the Back Benches. There will be other opportunities for hon. Members to raise the matter, doubtless even tomorrow.

Mr. Dennis Skinner: On a point of order, Mr. Speaker.

Mr. Speaker: Is it on a different matter?

Mr. Skinner: Yes, Mr. Speaker. As you will be aware, those responsible are still deliberating over the question of televising the House. In the meantime, we have to watch television programmes about politics and other matters. From what I gather, on Friday night, on Channel 4, there will be an interesting programme about the life and times of the Prime Minister and that it will suggest that Leon Brittan is reported as saying that Bernard Ingham and Charles Powell deliberately leaked the Solicitor-General's letter about Westland. If so, that confirms what my hon. Friend the Member for Hamilton (Mr. Robertson) said about the Prime Minister continually misleading the House. If that is the case, she should be brought here to explain.

Mr. Speaker: I do not know what the programme will say—

Mr. Skinner: I urge you to watch it, Mr. Speaker.

Mr. Speaker: I should like to watch it, but I shall be holding a constituency surgery.

Mr. Norman Buchan: On a point of order, Mr. Speaker. I seek your help and guidance. Elements of war have broken out in relation to agreements by which we were bound. That is the situation in Namibia. There must be some means by which a responsible Minister can be made to come to the House to make a statement on that subject. Apart from the needs of the House, it is imperative that that is done for the sake of the issue that is involved. The Leader of the House is in his place. Can it be put to him, through you, Mr. Speaker, that a statement is required and should be made and the inaccurate statements about the situation withdrawn?

Mr. Speaker: An opportunity will arise at Prime Minister's Question Time tomorrow, if the House wishes to pursue the subject. There will also be business questions tomorrow. The Leader of the House will have heard what has been said, and doubtless there may be the possibility of the House debating the matter.

Mr. Paul Boateng: On a point of order, Mr. Speaker.

Mr. Speaker: Does the hon. Gentleman wish to raise a point of order on a different matter?

Mr. Boateng: Further to the response of the Leader of the House—

Mr. Speaker: Order. That is not a matter for me. We have a very busy day ahead and I suggest that we should now get on.

Mr. David Winnick: On a point of order, Mr. Speaker. My point concerns the disciplining of a Member of the House. My hon. Friend the Member for Linlithgow (Mr. Dalyell) was banned from the House because of a remark that he made about the Prime Minister. If, however, it turns out that what he said was basically true—that the information was leaked on the direct instructions of the Prime Minister's press secretary and private secretary, which does not seem to be any longer in dispute as a result of what Sir Leon Brittan has said—then surely my hon. Friend was perfectly right—

Mr. Speaker: Order. I do not intend to be drawn into an argument about a programme that none of us has yet seen.

Mr. Tony Banks: On a point of order, Mr. Speaker.

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: By leave of the House, I shall put together the Questions on the three motions relating to statutory instruments.

Ordered,
That the Food Protection (Emergency Prohibitions) (Sea Fish) Order 1989 (S.I., 1989, No. 529) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Advice and Assistance (Financial Conditions) (Scotland) Regulations 1989 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Civil Legal Aid (Financial Conditions) (Scotland) Regulations 1989 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Maclean.]

WELSH AFFAIRS

Ordered,
That the matter of Housing in Wales, being a matter relating exclusively to Wales, be referred to the Welsh Grand Committee for its consideration.—[Mr. Maclean.]

Mr. Tony Banks: On a point of order, Mr. Speaker. I have been standing on my feet waiting to put a point of order.

Mr. Speaker: Order. The hon. Gentleman, who is a former Whip, knows that when Mr. Speaker is on his feet he must resume his seat. However, if he wishes to raise a point of order on a different matter, and if it will be helpful to us, I will take it.

Mr. Banks: We former Whips should stick together, Mr. Speaker.
I would like you to expound a little more, if you would, Mr. Speaker, on the question of the sub judice rule. I understood that sub judice was involved when a matter was before the court and that if we discussed the issue in the House we might prejudice the opinions of a jury. I do not understand how the sub judice rule applies to the DTI report on Lonrho and the Harrods takeover. It appears that we are talking about a report in which the Fayeds have been described as a bunch of liars—

Mr. Speaker: Order. We former Whips should certainly keep together. If the hon. Gentleman would like to have a private tutorial with me, I shall be very pleased to instruct him.

Unprescribed Spectacles (Health Warnings)

Miss Ann Widdecombe: I beg to move,
That leave be given to bring in a Bill to make it compulsory to display health warnings where spectacles are sold without prescription.
Under the Health and Medicines Act 1988 it is legal for spectacles to be sold over the counter without a prescription. The practice is restricted to spectacles which have simple magnifying lenses to help people with reading difficulties. Nevertheless, it is likely to become extremely dangerous as it militates against the early discovery of eye disease.
It is common ground that a significant amount of eye disease such as glaucoma is discovered, entirely incidentally, during regular eye check-ups. Very often the patient has such a check-up because of deteriorating vision and ordinary reading difficulties, the eye test is carried out and quite apart from the vision defect the incipient disease is discovered. Under the new system, people between 40 and 50 who might normally expect their reading sight to deteriorate will, in effect, be able to prescribe their own spectacles without any eye check-up or any prescription by trying out various lenses until they reach the ones with which they are most comfortable.
I do not wish to prevent anyone from being able to buy cheap spectacles without the hassle of a test and a prescription, but people should be aware that by forfeiting the chance of an eye test and properly prescribed spectacles they run the risk of incipient disease remaining undiscovered. More seriously, some people have vision defects directly attributable to eye disease, but if they find spectacles which make reading more comfortable they may assume that those spectacles are right for them and the more serious causes of their vision defects will not be discovered. No two eyes are alike. When a person is prescribed spectacles by a practising optician, the specification for each lens is likely to differ, if only by an infinitesimal amount. Individuals prescribing their own spectacles are not likely to obtain that precise variation and thus are likely to be wearing spectacles which do not exactly suit their requirements.
Medical opinion seems to have gone into reverse and now says that no damage is done to adults' sight by wearing the wrong spectacles. If that is so, when the Government were deregulating the provision of frames, why were they so particular to keep the dispensing of lenses separate? I and other hon. Members raised those points during the proceedings on the Health and Medicines Bill and the then Minister promised that the Government would consider the possibility of displaying health warnings where spectacles are sold, warning people of the dangers of forgoing the eye test.
There is no reason to suppose that that would be remotely deleterious to those selling spectacles without prescription. The warning would not be against the spectacles themselves—it would simply stress that regular eye tests can prevent eye disease. No reputable dealer could have any possible objection to displaying such a warning on the counter where people are self-prescribing. Such people may be self-prescribing for the second or even the third time, which would suggest that for six years they have missed the opportunity to have regular eye


check-ups. Individuals would have a choice. They could buy the spectacles and forget the eye check-up, they could take notice of the warning and perhaps buy the spectacles but have the eye check-up anyway, or they could have the eye check-up and then obtain properly prescribed spectacles.
It is a well-established principle that where there is likely to be danger to an individual from any course of action, whether it be smoking or anything else, a warning is issued. We would greatly improve preventive eye medicine if, in conjunction with the deregulation of the provision of reading spectacles, warnings were issued about the relevance of the eye check for disease rather than simply the correction of vision defects.
I believe that the Bill is essential and is in no way in opposition to the spirit of the Health and Medicines Act 1988.

Question put and agreed to.

Bill ordered to be brought in by Miss Ann Widdecombe, Dame Jill Knight, Mr. David Blunkett, Mr. David Amess, Mr. D. N. Campbell-Savours, Mr. Robert G. Hughes, Mr. David Alton, and Mr. David Shaw.

UNPRESCRIBED SPECTACLES (HEALTH WARNINGS)

Miss Ann Widdecombe accordingly presented a Bill to make it compulsory to display health warnings where spectacles are sold without prescription: And the same was read the First time; and ordered to be read a Second time upon Friday 7 July and to be printed. [Bill 111.]

Orders of the Day — Electricity Bill

As amended (in the Standing Committee), considered.

Ordered,
That the Bill be considered in the following order, namely, new Clauses, Clause 1, Schedule 1, Clause 2, Schedule 2, Clauses 3 to 9, Schedules 3 to:5, Clauses 10 to 22, Schedule 6, Clauses 23 to 29, Schedule 7, Clauses 30 to 33, Schedule 8, Clauses 34 and 35, Schedule 9, Clauses 36 to 64, Schedule 10, Clauses 65 to 83, Schedule 11, Clauses 84 to 90, Schedule 12, Clauses 91 to 94, Schedule 13, Clauses 95 to 104, Schedules 14 to 16, Clause 105, and new Schedules.—[Mr. Michael Spicer.]

New Clause 4

DISCHARGE ETC. OF CERTAIN ADVANCES AND LOANS MADE TO EXISTING BODIES

`.—(1) The following powers, namely—

(a) the power conferred on the Secretary of State by subsection (3) of section 2 of the Electricity and Gas Act 1963 to give directions as the repayment of advances made by him under that section to the Electricity Council; and
(b) the power conferred on the Secretary of State by subsection (2) of section 24 of the Electricity (Scotland) Act 1979 to give directions as to the repayment of advances made by him under that section to a Scottish Board,
shall include power to direct the Council or Board to discharge its liabilities in respect of any advance so made by a payment to him, on such date as is specified in the direction, of such amount as is so specified.

(2) The Treasury may direct the Electricity Council or a Scottish Board to do anything specified in the direction which is requisite or expedient for the purpose of securing the discharge, or the transfer to the Treasury, of the Council's or Board's liabilities in respect of any foreign currency loan made to the Council or Board.

(3) Where the liabilities of the Electricity Council or a Scottish Board in respect of any foreign currency loan made to the Council or Board are to be discharged (whether in pursuance of a direction under subsection (2) above or otherwise), the Treasury may direct that the amount to be paid to the Treasury by the Council or Board for the foreign currency required for the purpose of securing the discharge shall be such amount as is specified in the direction.

(4) Where the liabilities of the Electricity Council or a Scottish Board in respect of any foreign currency loan made to the Council or Board are to be transferred to the Treasury (whether in pursuance of a direction under subsection (2) above or otherwise), the Treasury may direct the Council or Board to pay the Treasury, on the date of the transfer, such amount as is specified in the direction.

(5) The amount specified in a direction under subsection (1), (3) or (4) above shall be the aggregate of the present values (calculated in such manner and by reference to such rate of interest as the Secretary of State with the approval of the Treasury or, as the case may be, the Treasury may determine) of—

(a) in the case of a direction under subsection (1), the payments which, if the Council's or Board's liabilities in respect of the advance were not discharged before the final date, would fall to be made to the Secretary of State in respect of the advance;
(b) in the case of a direction under subsection (3) or (4), the payments which, if the Council's or Board's liabilities in respect of the loan were not discharged or transferred before the final date, would fall to be made the Treasury under the relevant exchange cover agreement.

(6) The Secretary of State may direct the Electricity Council to exercise its powers under section 21 of the


Electricity Act 1957 in relation to any amount which falls to be paid by the Council in pursuance of a direction under subsection (1), (3) or (4) above in such manner as is specified in the direction under this subsection; and such a direction may in particular require contributions to be made by all or any of the Electricity Boards in England and Wales in such amounts as are specified in the direction.

(7) Any sums received by the Secretary of State in pursuance of a direction under subsection (1) above or by the Treasury in pursuance of a direction under subsection (4) above shall be paid into the National Loans Fund; and any sums received by the Treasury in pursuance of a direction under subsection (3) above shall be paid into the Exchange Equalisation Account.

(8) In this section—
"the final date", in relation to an advance or loan, means the date on which the final payment in respect of the advance or loan falls to be made;
"foreign currency" means a currency other than sterling;
"foreign currency loan" means a loan made wholly or mainly in a foreign currency;
"the relevant exchange cover agreement", in relation to a foreign currency loan, means the agreement made under section 1 of the Exchange Equalisation Account Act 1979 with respect to the payments falling to be made in respect of that loan.'.—[Mr. Michael Spicer.]

Brought up, and read the First time.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to consider Government amendments Nos. 68 to 72.

Mr. Spicer: This new clause was the subject of the Ways and Means resolution we debated last night. Amendments Nos. 68 to 72, which are grouped with the new clause, relate to the money resolution which was also before the House last night.
In the case of England and Wales, it makes sense for all the long-term debt of the industry, including its foreign debt, to be repaid when the successor companies are set up. In that way, the companies can be properly structured financially in preparation for the private sector where their borrowing will no longer be protected and constrained by rules appropriate to the public sector.
Until flotation, while the companies remain in the public sector, they will be able to borrow for short-term purposes from the national loans fund under clause 72 and to have Treasury guarantees on market borrowing under the proposed amendment No. 68 to clause 73. That will cease when the companies are privatised.
In Scotland, where the debts of the industry are much larger than in England and Wales, the long-term debt will be converted into debentures, issued share capital and reserves after vesting.
During the debate on the money resolution I set out the need for amendments Nos. 69 to 72, which set the borrowing limits of the industry in England and Wales at £2,000 million. In the context of an industry with a turnover of £11 billion, that is by no means a large borrowing limit. It has to be seen in the context of present borrowing, which is about £1·6 billion.
The question of continued parliamentary scrutiny was raised in the debate last night, especially by the hon. Member for Bradford, South (Mr. Cryer). Under clause 73, each issue of a Treasury guarantee requires a written

statement to be laid before both Houses of Parliament and, under clause 72, each financial year the Secretary of State will have to prepare an account of transactions from and to the national loans fund and will have to lay it before Parliament.

Mr. Kevin Barron: We understand that that is the position under clauses 72 and 73. In relation to subsection (1) of new clause 4, it is likely that restructuring will go ahead before flotation and that the capital restructuring will be completed before then. Debts will be paid off in England and Wales.
The Minister referred to the debts of the Scottish industry, which were accumulated largely as a result of investment in nuclear electricity, especially at Torness, and said that those debts will be changed into a combination of debentures, issued share capital and reserves. How much will that cost the British taxpayer? It seems that, once again, the debts of nuclear power will be written off for it to go into the private sector.
On subsection (2), will the Minister confirm that foreign currency debts in England and Wales will be wholly paid off before the flotation of the companies and that Scotland will have the bulk of that debt paid off? What is the foreign currency debt of the Scottish industry, and how much of it will still be outstanding when the electricity industry is floated into the private sector?
Under subsection (6), the Electricity Council will be able to levy repayments of debt from the boards. Does the Minister envisage any disadvantage to the boards if that exercise takes place before the companies are floated? The boards in England and Wales differ in their economic structures and the consumers they supply. Does the Minister believe that any areas will be disadvantaged when the debts that the boards owe the Electricity Council are reclaimed?

Mr. Spicer: At the end of March, the Scottish boards had £1,591 million in outstanding debt to the national loans fund, £1,019 million outstanding in foreign borrowings and £500 million in short-term deposits. Those figures contrast with the position elsewhere. There is no disguising the fact that that is one reason why the Scottish companies must be treated differently from other companies with respect to the repayment of borrowings. For the English companies, that repayment will not be a difficult matter, as they have considerable deposits which could be used to finance the repayment of borrowings—at least in part.
I cannot answer directly the question about the exact nature of restructuring and it is not reasonable to expect the Government to do so. It is some time yet until the companies are floated, and that is the point at which the balance sheets and the financial structure of the companies should be laid out.

Mr. Barron: Will the Minister give way?

Mr. Spicer: I will, but I will answer the hon. Gentleman's question first about whether the area boards will be disadvantaged if their deposits are used for the repayment of debt. The answer is no. When we restructure the finances and balance sheets of the area board companies, which we shall do before flotation, we shall ensure that there is no disadvantage incurred in the way suggested—properly—by the hon. Gentleman. I can give him that assurance.

4 pm

Mr. Barron: The Minister says that the Government feel that it would be unreasonable and inconvenient for them to tell us exactly how the restructuring of the debt in Scotland will take place. Does he agree that the taxpayer should know exactly the amount that will be seen as a write-off? It cannot be unreasonable for us to hear the exact amount, even if it is given in percentage terms. Exactly how much will this cost the British taxpayer?

Mr. Spicer: Of course the exact cost to the British taxpayer will be known. In none of the privatisations with which I have been associated—I have been associated with several in recent years—have we come before Parliament with the financial restructuring until closer to the date of the privatisation. That programme is as yet not fixed, and when the time comes there will, of course, be a full disclosure of what, if any, write-offs will occur and any costs that there would therefore be to the public purse.

Question put and agred to.

Clause read a Second time, and added to the Bill.

New Clause 5

ADDITIONAL TERMS OF SUPPLY

' .A public electricity supplier may require any person who requires a supply of electricity in pursuance of section 15(1) above to accept in respect of the supply—
(a) any restrictions which must be imposed for the purpose of enabling the supplier to comply with regulations under section 27 below; and
(b) any terms restricting any liability of the supplier for economic loss resulting from negligence which it is reasonable in all the circumstance for that person to be required to accept.'.—[Mr. Michael Spicer.]

Brought up, and read the First time.

Mr. Michael Spicer: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this, it will be convenient to take Government amendments Nos. 12 to 14, 16, 17 to 21, and 26.

Mr. Spicer: New clause 5 allows the public electricity supplier to require anyone requesting a supply to accept certain additional terms on that supply. However, it will not weaken the obligation to supply electricity. That is because the new terms will apply only to two specific aspects of the supply. It is also because if there is any dispute over the terms of supply, the consumer will have the right to ask for an independent determination by the director under clause 21. Under amendment No. 13, which is in this group, the customer will be informed of that right.
The first of the contexts in which additional terms of supply will be permitted is in respect of safety. At present, the Bill does not allow the supplier to impose the restrictions necessary to allow him to comply with safety regulations. That could give rise to a potential anomaly. The supplier could be obliged to provide a supply under clause 15 although in doing so he would contravene the requirements of regulations made under clause 27 on safety. The new clause would therefore give the supplier the right to impose restrictions on the supply where necessary to enable him to comply with those safety regulations.
The second area in which terms could be imposed by the supplier under new clause 5 will ensure that consumers in general are provided with secure supplies without any

need for expensive price increases. As the Bill stands, a consumer would have the right to take action for any losses suffered as a result of negligence. It is right that in general such a remedy should be available to consumers. We would expect suppliers to take out normal commercial insurance to cover that possibility. However, in some instances a couple of seconds of lost power could have highly significant effects, especially in these days when so such dependence is placed on computers. There could be little or no—

Mr. Dennis Skinner: The Minister should talk about computer breakdowns.

Mr. Spicer: I shall talk to the hon. Member for Bolsover (Mr. Skinner) afterwards to explain just how inaccurate was his intervention on this last night. I shall be happy to debate that matter with him if he wishes to intervene. I will not discuss it outside the Chamber—the hon. Gentleman often addresses us outside the Chamber —but I am happy to debate it inside the Chamber.
There might be little or no actual physical loss, but I he economic consequences could be major, far outstripping the actual value of any supply lost. In cases in which the degree of sensitivity to the loss of supply is so much greater than normal, under the Bill as it stands the supplier would have to take on the role of insurer for the consumer involved. The costs of insurance in such cases are likely to be high and could be met only through increased charges to consumers as a whole. We do not believe that it is justified to require the mass of consumers to face increased charges because of the particular sensitivity to loss of supply of a very small number of consumers.
To avoid that outcome, the new clause would enable the public electricity suppliers to impose additional terms restricting liability for economic loss so far as it is reasonable in the circumstances to do so. The restriction of liability would not apply to physical loss or damage but only to economic loss, and only to the extent that the restriction was reasonable. Any dispute over a restriction would come within the provisions of clause 21, allowing for independent determination by the director.
In the light of that explanation, I am sure that the House will welcome the new clause for the protection that it affords for the safety of supply and for consumers generally.
The other Government amendments are drafting amendments or consequential on new clause 5, except for amendment No. 13, to which I have already referred, and amendments Nos. 16, 21 and 26. Amendment No. 16 meets the points raised in Committee and provides that whenever a supplier serves a notice requiring security from an existing consumer he must at the same time inform the consumer of his right to have any dispute over that security determined by the director.

Mr. A. J. Beith: indicated assent.

Mr. Spicer: The hon. Member nods. That point was raised in Committee and the Government brought forward the amendment to meet our assurance.
Amendment No. 21 makes the continuation of an existing supply while any dispute affecting it is determined a matter for the director's discretion. Amendment No. 26 ensures that the director will be able to use his enforcement powers in respect of any breach of the provisions of new clause 5.
I hope that the House will feel able to accept new clause 5 and the associated amendments.

Mr. Barron: It is strange that after weeks in Committee the Government have come forward on Report to add things to the hastily cooked-up piece of ideology known as the Electricity Bill. On Second Reading and in Committee there was a strong statement by the Government to the effect that the duty of supply will be as never before—that we shall get away from the 50-yard rule in terms of domestic dwellings, and so on, and that we shall have a better electricity supply than we had in the public sector for many decades. Moreover, we were told, if anything fails and the lights go out we shall be able to get compensation from the successor companies.
Now, however, it seems that that may not be the case. The successor companies may have told the Government what the cost had been to the public sector over the years and what it might be to the private sector if there were a loss of electricity, especially to sensitive users such as commerce or industry, or indeed to domestic premises.
The Minister has partly answered the question that I was about to put to him, but what does the new clause mean in relation to the regulations in clause 27? The Minister says that it is all to do with safety, and I accept that, but does it mean any change in the present position? What is the current relationship between the right of supply and any safety regulations which might be seen to interfere?
Paragraph (b) concerns interruption of supply and the restriction on a supplier's liability. What happens at present if there is a power cut in a sensitive area, perhaps in a high-tech or industrial company? What obligations do the current area boards have in relation to insurance and a consumer's right to claim from them if there has been a major loss? Will there be a change in the present procedure and, if so, why? Will the new successor boards be feather-bedded against the actual cost of failing to meet a demand of a consumer with whom they have contracted in one form or another? Those questions appear relevant and must be answered by the Minister.
We are now at the Report stage of a Bill which was supposed to be the best thing ever for electricity generation and supply. Yet every time we meet to discuss it we have to accept amendments and new clauses which apparently seek to protect the industry from the problems that will be caused by putting this public utility into the private sector.

Mr. Beith: The new clause and the series of amendments grouped with it include some useful improvements to the Bill. The Minister referred to the one that will enable the customer to know his rights. That is something for which we pressed in Committee and I am glad that it has been included. Looking at the position so far, the inclusion of the restriction on liability is necessary, but, if the debate goes a little further, I may be persuaded another way. However, taking the Bill as it stood, all the amendments and the new clause together, the right to supply is still not what it appears to be, primarily because of the financial implications involved.
It is all very well for someone to have a right to require an electricity board to supply electricity, but if the company can then turn round and say, "Yes, you have that right and we will exercise it, but the estimated cost is

£2,500," that right does not amount to a row of beans. In my constituency, for example, charges of £115,000 for three properties, £200,000 for 10 properties and £3,906 for one property fewer than four miles from the centre of the town of Berwick have been quoted.
It is not merely that the companies in estimating the cost of providing the right to supply are likely to be very tough or demanding, but that they will argue that they have no right to in any way subsidise one consumer at the expense of others. Therefore, the amendments and the new clause will not be effective in the absence of any provision that would specifically allow and encourage the companies to meet the objective of providing electricity supplies throughout the country.
In this day and age it is surely a reasonable objective that wherever practically possible homes should have access to an electricity supply. If that were not so, the Government would not provide for the obligation to supply. Although they have not done so for gas, the Government consider it reasonable for every home to have a connection to the mains electricity supply. That will not be achieved, however, at the sort of prices being charged to remaining homes.
If those remaining homes had been in the North of Scotland Hydro-Electric Board area, up to now none of them would have had to pay more than £600. That in itself is quite a high charge, but at least the North of Scotland Hydro-Electric Board is backed by provisions that require it to have regard to the general development of the area and allow it to meet the cost of extending the electricity supply. The result is that in an area where many properties are more remote than they are in England, the level of connection of properties to the electricity supply is higher. Not many people realise that in the remotest Highlands of Scotland the proportion of properties connected to mains electricity is higher than in Northumberland, in Devon and in a number of other rural parts of Britain.
The time has surely come to clear up the remaining gaps in the electricity supply system, but the duty to supply as set out in the Bill and in the amendments is not sufficiently strong to do that. The Government could have made that duty stronger and they could have introduced amendments on the lines of the amendments that we introduced in Committee. Our amendments would have given the companies at least the opportunity, preferably the obligation, to continue the work of extending the electricity supply and to use some of the large funds that will be made available to them to do that. As it is, they will try to load on to every customer the cost of extending the supply and often that cost will be high.
4.15 pm
I am sorry to say that, despite the minor improvements in the new clause and associated amendments, a duty to supply will not be a reality for thousands of people in this country. They still have to manage without any electricity or they face the almost impossible task of trying to run two or three domestic appliances off a generator. As I told the Committee, anyone who has had the experience of trying to run a washing machine, a television and a few electric lights off a small generator on a dark winter's night knows that it is not much fun. That does not contribute to bringing up a family in reasonable conditions.
Farm workers, shepherds, and other people living and working in the countryside will have to put up with such a way of life for a great deal longer unless better provisions than those in the Bill are made.

Mr. Peter Hardy: The hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke about minor improvements, but "mini-minor" improvements might be a better description.
In Committee we agreed with the hon. Gentleman about the problems of rural supply and I am sure that he shares my belief that there will not be a massive eagerness on the part of private generators to supply small-scale customers in our remote areas. The proposed improvements will not take us very far in that direction.
In common with my hon. Friend the Member for Rother Valley (Mr. Barron) I recall the ebullient and sweeping speech made by the Secretary of State on Second Reading. The central point of his speech was that we would have masses of competition, new suppliers, enormous improvement and dramatic change. I told the Secretary of State then that I did not think that he had read his own Bill because clause 15 hedges everything about to the point that the right hon. Gentleman's sweeping and ebullient claims are somewhat—[Interruption.] My hon. Friend the Member for Bolsover (Mr. Skinner) perhaps describes it more effectively than I would have done.

Mr. Rhodri Morgan: Spell it.

Mr. Hardy: I have no intention of spelling it. The comment made by my hon. Friend the Member for Bolsover was entirely justified if not entirely in place.
At the time of Second Reading the Secretary of State had not read clause 15. It is obvious that the claims that he then made and the posture that he adopted was hedged about to such an extent that his claims were questionable. To add further hedging with the new clause warrants further comment.
It is interesting that new clause 5(b) demonstrates that, at last, the Government accept that negligence is possible. It is a modest contribution to the Government's realisation that negligence is encountered from time to time. As the months pass we may see more examples of such negligence in the Bill and the subsequent privatisation.
I hope that we do not vote against the new clause, but it is worth putting on the record that, once again, it adds further contradictions to the claims made by the Secretary of State on Second Reading.

Mr. Frank Haynes: First, I welcome the Secretary of State who is in his place today. We really did not see a lot of him Upstairs in Committee when we did all the graft.

Mr. Michael Spicer: Come off it.

Mr. Haynes: I do not know why the junior Minister says, "Come off it." Is he protecting the Secretary of State? I am sure that the right hon. Gentleman can look after himself. We intend to argue about what the Government want to do about the privatisation of electricity and I hope that the junior Minister, who will reply at the end of the debate, will keep his mouth closed for a minute and listen to what is said instead of yatting away to his right hon. Friend at his side. That happens all the time, and it is wrong. Afterwards, some of these Ministers say that they do not remember what an hon. Member said, or what the

Opposition said. Is it any wonder when they are sitting gas-bagging on the Treasury Bench? Ministers must listen to what is being said.
I remember the speech made by the Secretary of State on Second Reading about the dramatic changes that were going to take place. He also talked about something else —consumer rights. We talked about consumer rights in Committee and we know what sort of consumer rights that there will be. I experienced them not long ago in my constituency—under the present regime.
My hon. Friend for Rother Valley (Mr. Barron) talked about when power is cut off and the difficulties that the consumer will then face, but what about upsurges of power which can damage people's property—their washing machines, refrigerators, televisions and God knows what? When we were in Committee I did not hear the junior Minister describe how the consumer would be looked after if that happened. Consumers want to know exactly what help they will receive, and what rights they will have. It is all right for the Secretary of State to nod and say "yes" but we want real answers to these questions. What sort of compensation or help will consumers get when there is an upsurge of power—as happens all the time? Not long ago, I experienced that in my own constituency, in the wonderful little village of Selston.
I do not suppose that the Secretary of State knows anything about Selston. However, my hon. Friend the Member for Bolsover (Mr. Skinner) does, because his constituency is not far down the road and he lives not far away. He knows what a wonderful little place it is. A row of houses suffered an upsurge of power which affected a number of consumers. I took the matter up with the area board but, to start with, it did not want to know. Therefore, I went and banged on the door in the hope that I had the support of the Secretary of State for Energy. I sorted it out in the end—[HON. MEMBERS: "Well done."] I am talking about the little village of Selston, which is only a minute patch on the map of the United Kingdom.

Mr. Skinner: I wonder whether Selston is the village which had a unique system of paying electricity bills many years ago under the old regime. Meters were emptied arid people would receive rebates. Some people put pit washers in the meter instead of two bob pieces and asked, "What happens if you put in more washers than there is rebate?" They were told that it would be left over until the next month. A new inspector arrived and stopped that practice. One of the fellows said, "He has broken custom arid practice so I am refusing to allow this new regime to apply." His electricity supply was cut off and he went to his Member of Parliament and said, "Will you get my electricity restored?" His Member of Parliament said that he would try. The fellow said, "I have got four kids and no lights or telly—nothing." The Member of Parliament said, "I will give you some candles." The man said, "Don't bother. I'm connected up with him next door." Is that the same village?

Mr. Haynes: It is the same on Report as it was in Committee, where Conservative Members received an education about this sort of thing. I shall come to the point made by my hon. Friend the Member for Bolsover but I shall make an additional point. My hon. Friend is right. That is what used to happen. Those so-called coins, made in the blacksmith's shop, were really efficient at the job: they fitted exactly. Those people knew what they were


doing. I do not know what those at the Treasury would have said if they had known that coins were being made for the meters on National Coal Board blacksmiths' premises. But the Secretary of State has cheated those people: they now have to put in a card rather than a coin, or so-called coin.
My hon. Friend the Member for Bolsover knows as well as I do that those coins can no longer be made because they have closed the damn pit. The Secretary of State laughs, but 1,100 people lost their jobs in that village when the Government closed the pit and stopped them from making those coins for the meter.

Mr. Skinner: Is not the moral of the story that the new owners of the electricity industry will have a double handful down in Selston and places like it? The Minister would do well to tell the potential purchasers about the trouble that they will have in collecting the money.

Mr. Haynes: That is one of the reasons why we have suggested to the Government that they should not privatise the industry. At present money is being poured into those people's pockets in massive tax reductions, but privatisation will bring real problems.
I am standing here, however, because I am concerned about the consumers. I am one of them. I live just down the road from the wonderful little village of Selston, in the constituency of Ashfield, in the beautiful county of Nottinghamshire. Even the Secretary of State is being given an education this afternoon. He was not in Committee very often to be educated, but his junior Minister was always there—and listened sometimes, although he did not give us the answers that we wanted.
I hope that we will be given an answer this afternoon. Will consumers really get their rights, or will they be robbed? Will they be taken for a ride by the so-called electricity experts who will move in and buy up our industry if the Government get away with this Bill and it becomes an Act? My fear is that under the Bill and the present Administration the consumer will not get a fair deal.

Mr. Michael Spicer: Mr. Deputy Speaker—[HON. MEMBERS: "Answer that lot."] I certainly will answer that lot, because it is easily answerable. First, however, let me reply to the hon. Member for Rother Valley (Mr. Barron). The hon. Gentleman asked what changes were being made to the present position. Existing safety regulations will apply. What has changed is that for the first time we are talking about consumers, who will have a right to supply. Whatever anyone says—for instance, the hon. Member for Berwick-upon-Tweed (Mr. Beith)—no one who lives more that 50 yd from a mains supply now has such a right. Of course supply is cost-related, but should the potential consumer feel that he has been overcharged he will for the first time have the right to appeal to the Director General of Electricity Supply.
The other change is that the obligation to supply has been switched to the electricity distribution company. That is one reason why we must ensure that the obligation relates to, and does not completely override, the need for safety regulations to apply.
I turn to the remarks of the hon. Member for Ashfield (Mr. Haynes), who is again behaving like a Whip, having gone all quiet on the Front Bench.

Mr. Haynes: I will not allow the Minister to provoke me. I have behaved myself in the Chamber—which is more than can be said of some hon. Members.

Mr. Spicer: I apologise to the hon. Gentleman if I provoked him with my reference to his having gone quiet. I can see that that may have been a bit provocative. Let me "unprovoke" the hon. Gentleman by saying that he was not quiet a few moments ago. If I may say so, he was talking a lot of rubbish—and I hope that that does not provoke him. I have to say to him and to the hon. Member for Wentworth (Mr. Hardy)—perhaps, indeed, to all hon. Members—that, far from the Opposition having educated us in Committee, the process was rather the other way round, particularly in respect of the question of consumers. It is quite right that it should be so, because the whole of this Bill is dedicated to the consumer. That is precisely why we are changing the situation, and we have three days on Report to carry on the process of education.
Opposition Members must accept that at present there is a monopoly supplier who determines the costs, whatever those costs may be, and then passes them, without any checks or balances, straight through to the consumer, the person to whom we are addressing ourselves today.

Mr. Joseph Ashton: If this legislation is dedicated to the consumer, will the consumer be able to have a coin-operated meter on demand—something that is not possible at present?

Mr. Spicer: The Bill incorporates arrangements for prepayment—something that no current legislation does. So far as prepayment is concerned, there will be new rights for the consumer that is quite clear.

Mr. Ashton: Will the consumer have the right to ask for the installation of equipment that will enable him to pay by a method other than meeting a big bill after a three-months delay?

Mr. Spicer: Of course, all sorts of things have to be taken into account—for instance, theft and matters to do with security, which must modify what is being done.
At present there are no checks and balances for the consumer. That will be changed radically by this Bill. It is a fundamental point, and it is no bad thing that the hon. Members for Ashfield and for Wentworth have raised it in the context of consumers. It is well to establish firmly on the record again that this Bill changes the situation fundamentally.[Interruption.] The hon. Member for Sedgefield (Mr. Blair) says that prices will be put up. If he wishes to make that kind of comment from a sedentary position, he must tell me why. We know of many projects —20 at the moment, and I am sure that there are many others in the pipeline—whose cost structures are considerably below those of the CEGB, on average. Under the Bill, it will be possible to have new power stations and generating arrangements—something which, by the way, would not be possible or practicable in the present situation.
Far from what the hon. Gentleman has suggested, the pressure on prices will be downward. I agree that the key factor here is which system will do more to put pressure on prices. It is part of our case that the downward pressure will be far greater in the private sector, under the terms of this Bill, than would be the case were the present situation


to persist—for precisely the reasons I have already given: that the present system is one in which a monopoly supplier passes his costs, without any checks or balances, straight through to the consumer. That must be less good, from the point of view of pressure on prices, than the system that we are proposing.

Mr. Morgan: Will the Minister please explain what he means by downward pressure on prices from the 20 private sector projects? They are attracted to come into the industry only by the price increases that the Secretary of State announced in April 1987 and April 1988. Had the Secretary of State not imposed those price increases, which were double what the industry had asked for, the headroom would be nowhere near what the private sector generators need to attract them into the industry on a competitive basis.

Mr. Spicer: I have a great deal of respect for the hon. Gentleman because of his knowledge of the industry and the way in which he puts his questions, but he has missed the fundamental point that in a private and varied system it is possible to introduce greater efficiency. It is not necessarily the case that private sector generating companies require an artificially high price to be set to attract them into the industry. All that they want is the opportunity to do business. That is precisely what the Bill will give them.

Mr. Hardy: The Minister had not dealt with the exemptions to which I referred when I said that the Secretary of State's ebullience was definitely hedged. According to clause 16, the consumer may have the right to demand a supply, but the supplier has a certain right to refuse to supply.
According to clause 16(2)(a), a public electricity supplier will not be required to give a supply of electricity if
he is prevented from doing so by circumstances not within his control; or
if
(c) it is not reasonable in all the circumstances for him to be required to do so.
Will those circumstances include the remote rural resident who has already been referred to in the debate?

Mr. Spicer: I have already made that point absolutely clear. I have also pointed out—I said earlier that it was the whole point of new clause 5—that certain conditions will be imposed, particularly when safety matters are involved. The supplier will have the right to specify under what conditions he is prepared to undertake the contract. However, those conditions must be reasonable and I have already referred to the kind of circumstances in which conditions could be imposed. We start from the basis of the right to supply. Only in the most extenuating circumstances where the test of reasonableness has been applied and where safety is concerned would the right to supply be modified.

Mr. William O'Brien: Does the Bill provide any protection for consumers over standing charges? As there is to be competition throughout the country over electricity supplies, will there also be competition over standing charges? Will the fact that the supply network is to be a separate operation result in another standing charge? Water authorities will levy two standing charges. Does the Bill provide any protection so that customers—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I find it difficult to understand the relationship between that point and the new clause.

Mr. Spicer: Standing charges will be essentially the same as they are now. However, the regulator will be able to determine whether the charges are excessive. That will be part of his duties.

Mr. Barron: I thank the Minister for answering my question about the scope of the regulations in terms of new clause 5. He said that there will be no change. However, he has avoided my question about paragraph (b). I shall ask it again so that he knows exactly what I am talking about.
Paragraph (b) refers to restricting the liability of the supplier for economic loss if he fails to supply electricity to a dwelling or to industry, commerce or hospitals. New clause 5 appears to contradict the speech of the Secretary of State for Energy. He referred to the compensation that would be made available to consumers if a public electricity supplier failed to supply electricity. That was incorporated in the White Pa per and it was referred to on Second Reading and in Committee. However, it now appears to be suggested that in future consumers will have to insure against economic loss if there is a failure to supply electricity.
Will there be any change, as regards area boards, in the obligation that the area board now has compared with the obligation that the private sector will have because of the Bill? It is important that that point is answered. If there is to be a cushion, we can see that taking the industry into the private sector benefits the consumer not at all but perhaps says to him that he must insure, because the industry will be unable to ensure that there is a supply of electricity.

Mr. Ashton: The Minister has failed abysmally to answer the point made by my hon. Friend the Member for Ashfield (Mr. Haynes)—my hon. Friend made it in a jocular manner, but it is important—about poor consumers who have great difficulty in paying their bills and who for many years have sought an automatic right to a coin-operated slot meter or to a meter which takes some sort of plastic token which disintegrates when inserted. That is the only way in which any one-parent family or anyone on a low income can enjoy a system of "pay as you burn".
Under such a system, thousands of consumers have found that they can manage to survive without getting into debt simply because if the meter cuts off at 10 o'clock on a Thursday night they go to bed and put the kids to bed or they manage with some sort of food that needs no cooking. That is how they survive when they know that they are coming to the end of the week and the Giro has not yet come. Many of my constituents, in an area with 17 per cent. unemployment, come into that category.
The electricity boards—and, indeed, the gas boards—have always resisted pressure to go back to the old system of collecting from slot meters because they do not want the job. They argue that collectors from meters are often hit on the head when they are collecting, people know when they are coming round and meters can be broken into by local burglars, thus increasing theft. I suspect that the real reason is not the desire to reduce theft but an unwillingness to let consumers know how much they are consuming,. They would prefer a system whereby we all get into debt for three months and until the bill comes in none of us knows how much it will be.
I wish that someone would invent some sort of meter which poor people could stick on their mantelpiece and which would show them how fast it was going round and how much electricity they were consuming so that they could, for instance, turn off a bar of the fire. It would work the other way as well—at present old people often sit and shiver in winter, terrified to turn on another bar of the fire because they do not know how much electricity it will take.
Power is probably the only product that people consume first and find out the price later. No one would go into a restaurant, order a meal and only after eating it ask how much it cost. Yet we are expected to consume electricity and gas in that way.

Mr. Keith Mans: Does the hon. Member agree with me that the area board statistics for the past three or four years, with their encouragement for pre-payment meters, plastic cards and other tokens, show that they are going in the direction that the hon. Member wishes and will continue to do so after privatisation?

Mr. Ashton: I am coming to that.
We are faced with the problem of people not knowing how much they have consumed until they have consumed it and then being faced with a big bill that they cannot pay. Instead of going down to the area office and explaining, they often let it drift.
The hon. Member for Wyre (Mr. Mans) referred to some sort of card. It costs £2 and one can check off how much has been used, but if the card expires on a Saturday or Sunday people cannot get down—

Mr. Mans: rose—

Mr. Ashton: The hon. Gentleman can make his point afterwards. I am not giving way all the time. If the hon. Gentleman wants to speak, he can speak later.
Occasionally I have received a complaint from a person with a card that it has run out at the weekend and he cannot get a replacement from the local office. In my constituency the local office might be 10 miles away, at Mansfield or Doncaster. Even if he has the money, there may be no bus to take him there. There are other problems, too.[Interruption.] The hon. Member for Wyre should not be too impatient. We have three days on this Bill so it is no use him getting excited.
The problem will be solved if the person in difficulty can put a 50p piece into a slot. The fuel policy action group can confirm that in some cases, after reconnection of a supply, the meter has been rigged to go at such a speed that the person gets only half what he pays for because he has debts to pay off, so it becomes like a treadmill and the consumer is back to square one.
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There are difficult and complicated methods of paying debts, but none is as effective as the old system under private enterprise. I was a boy before the industry was nationalised. In the poor areas in Sheffield, where I lived, everyone had a slot meter. In many terrace houses not every room had electricity. Often the area board would say to a family, "We think that you can only afford electricity in three rooms." My grandmother did not have electricity upstairs, and in the kitchen she had an old gas lamp,

because the area board thought that she would not be able to pay for more electricity. Nobody wants to go back to those days.
The private boards will find, like anyone else, that they will suffer bad debts. In the past the rest of us have paid for the bad debts. The authorities stick 2·5 per cent. on everybody's bill and we all pay. It is like the credit card companies which charge 27 per cent. interest because they have to cover for bad debts. With the nationalised industries, if there is a disconnection at least a Member of Parliament may raise the matter locally and exert pressure, or even ask a question in the House about the increasing number of disconnections. When the gas industry was sold off, disconnections rocketed—the people reading the meters were told to adopt a much tougher line—and exactly the same will happen with electricity. There will be a harder attitude to poor consumers who cannot pay their bills at the end of three months.
The Bill is not good enough. There is no protection for the poor one-parent family who cannot pay when suddenly faced with a bill for three months' electricity. The only protection is to give them the right to demand a "pay as you burn" system, but as yet there is no right for anyone to demand such a meter. I hope that the Minister can tell us that the Bill will include a provision to give that right to poor consumers.

Mr. Deputy Speaker: Before the Minister replies a second time, do any other hon. Members wish to take part in the debate? No.

Mr. Michael Spicer: Later amendments will address themselves specifically to the point which the hon. Member for Bassetlaw (Mr. Ashton) has raised. By way of a brief response, there will be a right to ask for prepayment meters if people want them. Far from disconnections going up, they are coming down dramatically. One reason is that people are getting prepayment meters. The hon. Gentleman referred to miscallibration of meters. In those circumstances there can be a direct appeal to the director general.
The hon. Gentleman raised the question of using cash rather than tokens. As my hon. Friend the Member for Wyre (Mr. Mans) mentioned, one reason for the move to prepayment systems, using tokens or cards, is precisely because they are more secure and cannot be robbed so easily. We will have a debate on the subject, but I can give the hon. Member for Bassetlaw those assurances on the questions that he raised on behalf of poorer consumers.

Mr. Mans: Does my hon. Friend agree that the hon. Member for Bassetlaw (Mr. Ashton) is living in the past? The type of prepayment meters now being fitted have a button on them to allow consumers £2 or £5 worth of free electricity which they pay for after the event. That gets over the problem that the hon. Gentleman suggested might arise for consumers.

Mr. Ashton: Will the Minister ask the boards to make that fact clear to the public in advertisements? I assure him that few members of the public know about it.

Mr. Spicer: It becomes a right, and with the latest technology the boards would do well to take the hon. Gentleman's advice and advertise it widely.
The hon. Member for Rother Valley (Mr. Barron) raised the question of liability, and one must ask what sort of consumers he had in mind. If the supply companies had


all the liability imposed on them, that would mean them having total insurance to cover all eventualities, and that would be extremely expensive. It would have to be paid for by other consumers in higher tariffs.
We say that there should be a test or reasonableness. We are making a distinction—that is what the new clause is about— between physical loss which is incurred through a breakdown in supply and which is fully insurable, and unreasonable economic loss—vast losses because of a temporary, perhaps few seconds' disruption of supply. For large computer companies or large companies owning computers—the type of consumer the new clause addresses—it would be surprising if they were not properly insured against such eventualities.

Mr. Barron: Will they be insured?

Mr. Spicer: I cannot speak for every company in the land. It would be surprising, first, if they were not properly insured and, secondly, if they did not have back-up systems, such as small generators, as a standby capacity. Most large computer users and manufacturers would have a standby capacity, and that is the type of company we are considering in this context.

Mr. Barron: What liability do the area boards have at present when eventualities of this type occur? Will companies have to insure differently in the future, or will liability be accepted by the boards?

Mr. Spicer: I will obtain the precise answer for the hon. Gentleman because I do not want to mislead him about the exact liability that the companies will have. We are talking about companies going into the private sector, where the issue of insurance will apply in the way I have described. But I will obtain for the hon. Gentleman the details of the precise status of the obligations and liabilities that are covered at present.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 6

Conditions for funding certain companies engaged in nuclear generation in Scotland

`.—(1) Without prejudice to section 7(1)(a) above, it may be a condition of a licence granted to a company ("the licence holder") that it shall from time to time provide any company to which subsection (2) below applies with such funds as may be determined by or under the condition in respect of such of that company's liabilities as may be so determined.

(2) This subsection applies to any company which—

(a) is deemed for the purposes of the Companies Act 1985 to be a subsidiary of the licence holder; or
(b) is a related company of the licence holder (as defined in paragraph 92 of Schedule 4 to that Act),
and is, at the time when the condition is imposed, engaged in the operation of a nuclear generating station in Scotland.

(3) Subsection (3) of section 7 above applies in respect of a condition included in a licence by virtue of this section as it applies in respect of a condition so included by virtue of subsection (1)(a) of that section.'.—[Mr. Lang.]

Brought up, and read the First time.

The Minister of State, Scottish Office (Mr. Ian Lang): I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 5, 6, 7, 15 and 65.

Mr. Lang: The new clause relates to a technicality in the relationship between Scottish Nuclear Limited and its parent companies. It will enable a licence condition to be

included in any licence or licences granted under the Bill requiring the licence holder to meet the liabilities of any subsidiary or related company operating a nuclear generating station in Scotland. The amendment applies only in Scotland, as it is only in Scotland that it s proposed that nuclear operations be conducted through a subsidiary company.
As hon. Members will be aware, it is a central part of the Government's proposals for restructuring the Scottish industry that there should be a separate company. The new clause will enable such a condition to be placed in the licences granted to the two electricity companies as successors to the Scottish boards to ensure that the liabilities of that subsidiary, Scottish Nuclear Limited, are met.
The long-term liabilities in question are those associated with the decommissioning of nuclear installations and the disposal of nuclear waste. Following privatisation, the nuclear stations in Scotland will be owned and operated by SNL, which is to be owned by the two electricity companies in proportion to their relative size.
SNL will be the nuclear site licensee and, as such, will be responsible for decommissioning the stations once generation has ceased. Such decommissioning is planned to take up to 100 years to complete. Financial provision will be made in the balance sheets of SNL and the parent companies against the long-term liabilities. The fact that financial provision is made in this way should ensure that funds are available to meet the long-term liabilities.
The clause covers a technicality which results from the subsidiary structure. As things stand, SNL, as a subsidiary company of the South of Scotland electricity company or a related company to the North of Scotland electricity company, would be unable to obtain funds from its parents without their agreement. While it is expected that the parents would agree, the Government recognise that it is prudent to ensure that there is a direct route to enforce the long-term liabilities against them.
Subsection (1) of the new clause provides for the inclusion of an appropriately drafted licence condition requiring the licence holder to provide such funds as may be determined by, or under the condition in respect of, the liabilities of a company specified in subsection (2). Subsection (2)(a) applies the clause to any company which, in terms of the Companies Act 1985, is a subsidiary of the licence holder; SNL will be a subsidiary of the south company by virtue of the fact that the south company holds more than half its equity share capital. Subsection (2)(b) applies the clause to any company which is a related company of the licence holder, defined in the Companies Act 1985 as meaning any body corporate in which the parent company holds, on a long-term basis, a qualifying capital interest for the purposes of securing a contribution to that company's own activities by the exercise of any control or influence arising from that interest.

Mr. George Foulkes (Carrick, Cumnock and Doom Valley): The Minister is speaking at a rapid pace about an issue which, in his initial remarks, he implied was merely technical but which is in fact of monumental importance.
He skipped rapidly over the point about SNL having responsibility for including in its accounts the costs of decommissioning any nuclear power stations that are closed. Will he explain precisely the position of Hunterston


A? The decision to decommission having been made prior to privatisation, will the responsibility for decommissioning that station be inherited by SNL?

Mr. Lang: I said that the new clause was concerned with a technicality because, in essence, it is. The relationship between Scottish Nuclear Limited and its parent companies and the respective roles of the parents and SNL are important and major issues, but the clause is not directly concerned with that. It is concerned with the technical possibility that the parent companies might escape a liability incurred by their subsidiaries. The matter was raised in Committee and I am sure that Opposition Members will welcome this additional provision, which is made in case such a situation should arise.
The nuclear assets of Hunterston A will be transferred to SNL and my expectation—I will seek confirmation of this and if I am wrong I will write to the hon. Gentleman, or if the opportunity arises, correct myself later is that Hunterston A would also form part of those nuclear assets and be transferred, notwithstanding that the decommissioning process, which may take 100 years, will already be under way.

Mr. Foulkes: The Minister is being helpful and has stated precisely that the nuclear assets of Hunterston A will be transferred to SNL. Do I assume that his reference to "assets" includes liabilities? In other words, may we assume that all aspects of Hunterston A—I am particularly concerned with the major liability of the cost of decommissioning—will be included in the liabilities of SNL and that all of that will be transferred to SNL? Perhaps the Minister has received a note on that by now.

Mr. Lang: I have indeed, and it confirms that I was correct in my assessment in reply to the hon. Gentleman's earlier intervention. Assets and liabilities will be transferred to SNL. The new clause is concerned with a technicality to ensure that the parent companies to SNL cannot escape their contribution to those liabilities. As I said, SNL is related to the north company on the basis described by the Companies Act 1985 from which I have quoted. In both cases, the new clause applies only to a company which, when the condition is imposed, is engaged in the operation of a nuclear generating station in Scotland.
Subsection (3) ensures that clause 7(3), which relates to the role of the director in relation to licence conditions, applies to any condition imposed by virtue of the new clause. The other amendments in the group are technical and I shall say something about them if the House wishes.

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Mr. Donald Dewar: The Minister has described new clause 6 as technical. I recognise that it builds in a safeguard to ensure that the parent company does not slough off some of its responsibilities in the sensitive subject with which the clause deals. However, it raises a number of interesting matters on which we are entitled to inquire, relating to the scale of funds which might be involved and which can be transferred under certain conditions of the licence if new clause 6 reaches the statute book.
There is no area where public interest and sensitivity is more marked than the nuclear subsidiary of the two

privatised companies in Scotland. While I imagine that it will be common ground that it is unlikely that any new capacity will be provided and that any nuclear or non-nuclear power stations will be built in Scotland for a considerable time, as my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) has pointed out, there are on the horizon very substantial liabilities and charges which will be the subject of some of the financial transfers in the new clause. Perhaps it would be fair for the Minister to provide some details of the exact scale of the transfers, the size of the liabilities and how the nuclear subsidiary will operate.
I do not want to speak at great length about the accumulated debt, but the Minister will have heard the exchanges between my hon. Friend the Member for Rother Valley (Mr. Barron) and the Under-Secretary of State for Energy in the past hour or so. We are all aware of the fact that there is something like £2·7 billion of accumulated debt between the two Scottish boards. I was interested to hear the Under-Secretary of State giving a breakdown of that debt between the national loan fund and more than £1,000 million of foreign debt included in that overall total.
It is important to know as soon as possible exactly what will happen to that debt and how much will be written off as it is a matter of such pressing importance to the electricity industry. I recall the briefing given in December 1988 by Mr. Donald Miller, the chairman of the SSEB at Torness in which he made a statement that I am sure the Minister recalls. He said that the company could not be privatised
unless the Government writes off a large part of the £2·2 billion debts it incurred in building them.
He was referring to the nuclear power stations.
I heard the Under-Secretary of State making it clear that he was a man of experience with many previous convictions in the privatisation campaign and that he did not think that it was yet time to reveal all, although he promised that sinister happening—a full disclosure—at some point. It is important that the Minister says something on the subject, particularly as I understand that a good deal of the foreign debt is with the European Investment bank. I am relying upon the expertise of some of my colleagues, but I understand that it is backed by Treasury exchange cover and by guarantees.
If I am right, the European Investment bank debt will be at a considerably lower rate of exchange than the going rate. If the European Investment bank debt is transferred to the Treasury before the transfer date, can we be sure that it will be at the same rate of interest and that there will be no disadvantage in terms of the new rates of interest to be charged on the substitute debt, as that will clearly affect the transfer of funds or the call upon those funds which we are discussing in new clause 6? Perhaps the Minister might quickly and simply deal with that when he replies.
Another aspect of that briefing—I almost said that notorious briefing because it was certainly much noticed —at Torness given by Mr. Donald Miller was that he made it clear that he had considerable doubts about the way in which the Government were approaching possible changes in Government policy, the variations in BNFL pricing policy and the impact that that could have on the balance sheet of the privatised companies. That will have a direct effect on new clause 6 and upon the calls on the parent company which it covers.


The House will be familiar with the fact that in the financial year 1987–88 the South of Scotland electricity board had a trading profit of £13 million which was dramatically transferred into a loss of £70 million simply because of the cost of transferring the Chapelcross power station—a.very old, minor power station—to the Cumbria board. Of course a great deal will emerge about future possible transactions which must affect the extent to which new clause 6 is used and whether it is necessary at all and are therefore relevant to the debate.
The House will recall that the chairman of the SSEB made it very clear in December 1988 that in his view the company would be, "unsellable" unless he received "the ultimate insurance" on the possible costs and the escalating expense of decommissioning. He said that the assurances
will have to besigned and sealed before one writes a prospectus—otherwise it will not be worth writing.
That was a very serious point to be made by someone who was about to become chairman of a private company approaching flotation.
It is clear that the solution to that problem will have a very far-reaching effect on the use that is made of new clause 6. I hope that the Minister will say something about that. A favourite jargon term often found in European debates is "transparency". I am in favour of transparency and knowing a little more about how the machinery will operate and what the implications will be. I say that in the light of what Mr. Miller said. I draw the Minister's attention to a story which appeared in The Scotsman on 8 March 1989 under the headline:
Nuclear costs deal eases SSEB's sell-off doubts".
It went on:
A secret agreement has been reached between Ministers and the South of Scotland Electricity Board which has removed one of the biggest question marks over the proposed privatisation of the Scottish power industry.
I cannot think of anything that will have a more direct effect upon the operation of new clause 6, and the amount of funding that will have to come from parent companies. We have an excellent opportunity relevant to the debate to get some information about that secret deal. It is particularly appropriate that the Minister of State should be at the Dispatch Box. It appears that he was the principal partner, together with Mr. Donald Miller, in the private discussions that the press tell us led to the deal.
The article says:
Both the SSEB and the Scottish Office yesterday confirmed however, that an understanding has been reached in which Mr. Miller's doubts have been satisfied… the key element is understood to be assurances on the contracts which fix ceiling levels on the amount of any unforeseen rise in nuclear costs and in the contracts which will govern the relationship after privatisation with British Nuclear Fuels Limited.
It goes on to say:
"A senior Scottish Office source"—
I am always suspicious when I read those words. However, that senior Scottish Office figure said that there was
still some way to go in the discussions before a firm announcement could be made but that the process involved `dotting the Is and crossing the Ts.'
I should like to hear from the Minister a little about the deal and what has happened. Clearly, it will have an important and direct impact upon the way in which new clause 6 will operate.
A particularly good example of the calls that may be made on new clause 6 is the issue to which my hon. Friend the Member for Carrick, Cumnock and Doon Valley

referred in his intervention—the decommissioning of Hunterston A Magnox station. I do not want to debate the merits of that decision because it would be going wide of the new clause. However, we are entitled to ask for some information about the implications of the decision in terms of the calls that may be made on the parent company under the licence agreements that will presumably be written in if the new clause is placed on the statute book.
I do not know what the cost will be but an article dated 30 March 1989 in Power in Europe, which is published by the Financial Times and is a reputable and informed trade paper, points out 
Hunterston A is the most efficient of the United Kingdom's Magnox stations, and is one of the most efficient nuclear units in the world, with a lifetime load factor of 82 per cent.
It goes on to point out:
only minimum expenditure is expected to be required at Hunterston A in order to receive the Nuclear Installations Inspectorate's approval for continued operation in the 1990s.
There is little dispute about that as the background to what has now happened.
The view of the author of that article is particularly relevant and interesting in terms of new clause 6. He believes that the real reason for the closure is that the operating costs of all Magnox stations in the United Kingdom have increased markedly in recent years, particularly because of higher BNFL charges for the reprocessing of spent fuel. If that is so, and the arrangements between BNFL and the privatised companies continue unaltered, the implications for the transfer of funds to the nuclear subsidiary company, which are envisaged in the new clause, are bound to be significant.

Mr. Foulkes: I agree with my hon. Friend's suspicions about the words, "senior Scottish Office sources". When one reads the words, "senior Labour MP" one knows that if someone is quoted in that way, one is about to be stabbed in the back—[Interruption.] Well, anyone would give their name if they had something good to say.
My hon. Friend mentioned. BNFL and its costs to the SSEB in relation to Hunterston A. BNFL has a private monopoly on the ability to provide reprocessing. Does that not illustrate beautifully the way in which the private monopolies, which have total control over the costs they charge, can have a grip on the consumer? That is the way the privatised electricity companies will have a grip on the consumer in relation to pricing.

Mr. Dewar: That is a fair comment. I do not want to follow my hon. Friend down that line but there are dangers and concerns. My hon. Friend's health seems to be remarkably good in view of the dangers he described of life in Parliament.

Mr. Foulkes: I was thinking about my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar).

Mr. Dewar: As always, I am touched.
I shall return to the thread of my argument. I was making an important point. II is an open secret and was the subject of specific comment when the Select Committee on Energy considered the matter. Evidence was given by Mr. Christopher Harding, chairman of BNFL. According to the article in Power in Europe he told the Select Committee that the "contract was unbreakable". That is the contract between the nuclear subsidiary whose fate we are discussing and BNFL. He said:


the contract was unbreakable; should the two utilities attempt to avoid reprocessing by long-term storage, for example, they would be obliged to pay BNFL the price of reprocessing anyway. It is, in effect, one of the biggest take-or-pay contracts in history.
Clearly, that will have a direct influence on what we are discussing now.
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I am entitled to ask the Minister if he can say whether that contract, in that remarkably inflexible state—almost a Leonine bargain—is still in place. If it is, the House should consider it in relation to the calls that are likely to be made under new clause 6.
Another point worth mentioning is that we are talking about the calls on funds to supply the nuclear subsidiary. No doubt nuclear expenditure will be linked to other types of generation and its availability. I do not want to transgress on your tolerance, Mr. Deputy Speaker, but it is important that the Minister mentions the SSEB's arrangements on coal burn. I say that because the state of coal burn and whether the agreement that has been negotiated over many years has been brought to a successful conclusion will inevitably affect the calls made under the new clause.
I do not want to strike a discordant note and I welcome the fact that the Minister intervened in the long-running negotiations and recognised that public interest was involved. However, I was saddened that we had to beat on his door for a couple of years without success and that an enormous amount of damage was done as a result of the delay and the Minister's refusal to do his duty.
We know that in principle an agreement for five years has been reached. Under the agreement the SSEB will take 2 million tonnes of coal a year. However, I understand that the last two years of the agreement are dependent on the use of the interconnector. That is a matter for speculation and concern. We do not know much about the details or whether Ministers are still completely satisfied that the deal will hold at this point. The Minister may wish to correct me and I would be glad to receive any details but there is nothing clear about the price. We have heard mention of 150p per gigajoule but we were told by the SSEB that it would have to receive 130p per gigajoule if it were to sell effectively into the interconnector. British Coal is said to be holding out for 180p per gigajoule.
Those are enormous variations. I unreservedly welcome the agreement in principle but I am concerned about the current state of play. I would be interested to know how much of the two million tonnes will be deep mined and how much will be opencast or whether there is any agreement on that. Those are all matters which, inevitably, affect the nuclear subsidiary and, therefore, the calls on the parent company's financial resources which may be made under new clause 6.
Another point, which is connected by the same logic to this debate, is what is happening about the interconnector. I raise this matter because I now read repeatedly in articles by well-informed journalists a suggestion that any sales by the Scottish private boards to the English distribution companies will come from nuclear base load electricity. The logic is that that is likely to find favour in the first-call system and may be more attractive and cheaper for clients south of the border. There is a real fear that the consumer will have to pay a price for that and that domestic costs

will spiral. It is important for the Minister to say a few words about that. I am anxious to see the interconnector working and sales increasing, which might do something to reduce the calls on the parent companies' finances under the mechanism envisaged in new clause 6. We are entitled to some information from the Minister on those points.
I am conscious of the fact that several of my hon. Friends wish to catch your eye, Mr. Deputy Speaker, and I am also aware that there will be another debate on Scottish matters when we come to the next group of amendments, which are concerned with the regulatory machinery. I give fair notice to the Minister that we shall raise such matters as the 8 per cent. increase in prices. I hoped that such rises could have been prevented under a proper regulatory system. The electricity consultative councils have been left bravely, but vainly, trying to hold the line for the consumer interest in the dying days of this Government's stewardship. However, we shall be discussing that in our later debate and I do not wish to transgress at present.
I ask the Minister to address some of the important points. If he is asking us to endorse new clause 6, he cannot do so on the basis that it is simply a technical matter to be nodded onto the statute book in a perfunctory manner. He must give us some idea of the shape and scale of the calls likely to be made under the new machinery and he must try to deal with the important points I have raised, not because of a peculiar and idiosyncratic interest of my own, but because they are of fundamental importance to the industry and the consumer.

Mr. Malcolm Bruce: It was interesting that the Minister tried to pass off new clause 6 as a technicality, when the very fact that it is necessary suggests that there is a rather more deep-seated problem, which has been touched on already by hon. Members and about which the Minister must come clean. The Minister has said, in effect, that the successor companies to the existing boards in Scotland will, under the Bill, inherit a liability—the requirement to own any nuclear subsidiary to which they are committed to provide funding, on a fairly open-ended basis. That means that the commercial judgment of the successor companies will be compromised by new clause 6. They would have some reason, if they are coming in with a fresh approach, to believe that the SSEB in particular has a record of profligate extravagance. It would not have been able to get away with such extravagance if it had been in the private sector.
The SSEB has been able to invest in providing 110 per cent. excess capacity in the Scottish generating system, which is way above any possible strategic or commercial requirement. That has been brought home in the past couple of weeks, as the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) remarked, by the announcement that the board is closing Hunterston A, the most efficient and consistently successful Magnox station, which still has a substantial effective life left. It is to be closed down for one reason—that the board cannot find, or foresee the possibility of finding, a market for the electricity that it produces.
That seems extraordinary, given that in the past couple of years a brand new nuclear power station has been opened on the other coast of Scotland. For a company to build a new power station and then to close down a smaller power station of a similar type and of proven efficiency suggests a complete lack of good commercial judgment


and an incredible degree of appalling forecasting. One must also consider that the massive Peterhead power station is operating consistently under capacity and the Inverkip was mothballed almost before it came on stream.
It is no wonder that the Scottish electricity industry is apprehensive about being exposed to market forces—if that were the Government's intention. It is not, and new clause 6 is a further indication of how ridiculous the Government's policy is on nuclear power and the operation of the market. It is, perhaps, appropriate to quote from Energy Economics, which, summarising Government policy on nuclear power, said:
Privatisation has meant that the UK has discovered it does not after all need an active fast breeder research programme, nor pour vast sums into nuclear fusion; that nuclear power is not as economic as viable alternatives; that reprocessing is an expensive waste of time; that decommissioning is a vast problem.
That is the state of the nuclear industry, and all those factors specifically affect the industry in Scotland.
Consumers may ask how much cheaper electricity in Scotland might have been had we had an efficient electricity board producing close to the required capacity, rather than servicing the debt for a massive over-capacity. The Bill has already provided the SSEB with a £2·5 billion nuclear debt write-off. Mr. Donald Miller has said that that is not enough. Presumably, this "technical amendment" is designed to ensure that not only will the taxpayer have to contribute to the massive excess of nuclear capacity in Scotland, but that the consumer will continue thereafter to fund it through electricity prices.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) made passing reference to the recent increase of 8·5 per cent. It is interesting to make the point that that increase is higher than that in England and Wales and higher than the rate of inflation—at least for this week, although inflation will no doubt catch up fairly soon. The point which has not been fully realised is that Scotland is now beginning the fairly rapid march from being the area of the United Kingdom that has enjoyed the cheapest electricity to being the area of the United Kingdom that will face the most expensive electricity as a direct result of this Bill. The electricity boards, while still in public ownership, are like the Welsh forwards, getting in their retaliation first. They are softening up the Scottish public to the idea that price increases in Scotland will move faster than in the rest of the United Kingdom.

Mr. Robert Maclennan:: Can my hon. Friend explain the relationship between his earlier remarks about the over-investment by the SSEB in the nuclear industry and the fact that Scotland, as he has rightly described, has enjoyed much cheaper electricity than our neighbours south of the border?

Mr. Bruce: The answer to that is that Scotland has had the advantage of access to hydro power. I made the point on Hunterston A about the success of the SSEB's engineering capability compared to that of the Central Electricity Generating Board. I acknowledge freely that the SSEB has been more successful technically than the CEGB in the development of nuclear power. However, I repeat that there was no justification for building Torness. If that money had not been invested, we would not have had to close Hunterston A and electricity prices in Scotland could have been even lower than we have

enjoyed. There is a combination of factors and I freely accept that the earlier efficiency of the nuclear industry, coupled with hydro prices, are the main explanation.
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However, having reached that position, the way forward that the SSEB is now pursuing should be questioned. I suggested in Committee that the Scottish electricity boards should at least consider selling Torness to an English user, lock stock and barrel—in other words, transfer the capacity. I accept that that is a contentious statement and that the South of Scotland electricity board is hardly likely to be keen on selling something of which it feels so technically proud. I am sure that hon. Members of all parties will recognise that it is legitimate to ask why we are closing an economic and apparently safe nuclear power station only two years after opening a new one. Surely the argument must be that we should never have built Torness in the first place but, having built it, might it not have been more sensible to have tried to sell Hunterston A so that its capacity could be used—

Mr. Jimmy Hood: We are well aware that the hon. Gentleman made this point earlier in Committee. Indeed, I referred to it in Committee when, unfortunately, the hon. Gentleman had briefly left the Committee room. If we sell off Torness to the English market so that it provides low-base, low-cost electricity to England, where will we in Scotland find a market for exporting our still-excess electricity?

Mr. Bruce: The hon. Gentleman makes a fair point. We have massive excess capacity in Scotland for which the South of Scotland electricity board has admitted that it will not be able to find a market. Having invested in that capacity, hon. Members should address the way in which we can ensure, that it is used to the maximum benefit for both the Scottish consumer and the British taxpayer. Closing a station does not seem to give the maximum benefit for the money invested.
I accept that having reached our present position—I do not think that we should have got here—we are left with the problem of excess capacity. All that I am suggesting is that that course of action should be examined because there is no possibility of securing the future of the coal industry in Scotland, about which the hon. Member for Clydesdale (Mr. Hood) is so legitimately concerned, if we have massive excess capacity. If Torness turns out to be the SSEB's cheapest investment, the SSEB might argue left to its own devices, that having made that investment, it might well choose to close the coal capacity and substitute Torness. There is therefore an argument that taking Torness out of the equation would help to create the balance that would ensure the coal industry's future.

Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will not pursue that point too far because we are going further and further away from the substance of new clause 6.

Mr. Bruce: I am grateful to you for putting me on the right track, Mr. Deputy Speaker. However, I hope that you will accept that costs relating to the continuing nuclear power industry are relevant to this new clause because the way in which those costs can be absorbed so as not to disadvantage the Scottish consumer is a point of real interest. The Government's new clause gives me cause for concern, because it means that, regardless of the


commercial judgment of the successor companies, Scottish consumers will have to pay more and more towards the cost of servicing that excess capacity. That will be particularly true if we fail to find a market for it and I have not met many people who have confidence that we shall secure such a market.
It seems extraordinary that we should continue to fund the nuclear industry in Scotland and close a nuclear power station at a time when the Central Electricity Generating Board is applying for planning permission to build up to four more nuclear power stations. If there is a requirement for nuclear capacity to meet the non-fossil fuel argument —leaving aside the merits and demerits of that argument —surely the sensible thing is to ensure that before we build new power stations we organise the existing capacity to ensure that it is fully utilised. To close power stations—

Mr. Deputy Speaker: Order. The hon. Gentleman may be pre-empting a debate that is yet to come.

Mr. Bruce: I accept that constraint, Mr. Deputy Speaker, and shall be happy to raise the matter later in the debate.
When the Minister replies I hope that he will have taken on board the fact that suggesting that this is a technical amendment is not good enough. The question that the Minister must answer is, if the nuclear subsidiary is to receive, as of right, funding from its parent companies, which is what they will be post-privatisation, will that funding simply be the transfer of funds provided by the taxpayer through the provisions of what will then be the Electricity Act, or will they be funds over and above those funds, which can then be recovered from the consumer in the form of increased prices?
The Minister must accept that two sources of funds are provided for. One is the ability of the industry to raise revenue and the other is the up to £6 billion that has been provided from taxpayers towards the cost of what is the substantially nuclear debt of writing off the nuclear decommissioning costs.
In response to the hon. Member for Carrick, Cumnock and Doon Valley, the Minister has already suggested that decommissioning is included in the provision of Hunterston A. If that is the case, we are entitled to know how much of that cost will be met by the taxpayer and how much will be borne by Scottish consumers. If that is not made clear, the new clause will seem to be about securing additional charges on the Scottish consumer towards the cost of the nuclear industry on top of what the taxpayer will have to invest. That might put a rather different complexion on the intervention made by my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) that the early investment in nuclear power may well have been beneficial to the consumer but from now on the Scottish consumer may find that he is paying through the nose. I should be grateful if the Minister could tell us exactly what the new clause means in that context.

Mr. Alexander Eadie: I am not as blasé about the cost structure of nuclear power or about its great advantages as the hon. Member for Gordon (Mr. Bruce). As you rightly said, Mr. Deputy Speaker, there is room for a debate so that we can get all the facts, figures and consequences of that. I repeat that I am not blasé about the great benefits—

Mr. Malcolm Bruce: Nor am I.

Mr. Eadie: Well, the hon. Gentleman appeared to be blasé in his speech. However, as you, Mr. Deputy Speaker, pointed out, the hon. Gentleman will have his opportunity later.
As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, the new clause affords us the opportunity to talk about the question of commercial judgment. Taxpayers' money is involved and we want some guidance and explanation from the Minister. When we are talking about commercial judgment we have great difficulty in even getting the Minister or his right hon. Friend the Secretary of State to come to the Dispatch Box to explain what is happening on coal burn in Scotland.
My hon. Friend the Member for Garscadden said that he thought that this debate would give the Minister the opportunity to give some information to the House about what is happening on the so-called agreement or understanding reached between the South of Scotland electricity board and British Coal. There can be no argument about it: the Secretary of State and his hon. Friends are responsible for the South of Scotland electricity board and for all the costs that are likely to be involved and, as my hon. Friend pointed out, billions rather than millions of pounds are involved in relation to SSEB debt. Commercial judgment must enter discussions about coal burn.
The Standing Orders would not permit me to go into all the details and arguments in favour of a greater coal industry in proportion to the nuclear power industry in Scotland. I hope that the Minister will not try to argue that nuclear power is much cheaper than coal. We have the figures: that argument is finished. It is now recognised that nuclear power is more expensive than coal. The Minister will probably argue that there are good, sound environmental reasons for nuclear power. We will later have an opportunity to challenge that argument.
Opposition Members are trying to extract from the Minister some information about what is happening to the coal burn agreement. He cannot stand back and say that it is a matter for commercial judgment, then put down a new clause involving not millions but billions of pounds, and ask the House to agree. We are entitled to an explanation. What is the agreement? How many millions of tonnes of coal are involved for the Scottish coal industry? As my hon. Friend the Member for Garscadden said, we want also to know what it involves in respect of opencast and deep mining.
I have a vested interest in the matter. There are two pits in my constituency. I hear of all the financial problems of the SSEB. A press release by British Coal states that it will not be 3·5 million tonnes and that it may be 2 million tonnes of coal. We want to know how much will be opencast and how much will be deep mined.

Mr. Deputy Speaker: Order. I hesitate to interrupt the hon. Gentleman, but I hope that he will not go too far down that road. The new clause specifically deals with funding relating to nuclear power stations.

Mr. Eadie: Thank you for your guidance, Mr. Deputy Speaker. However, as we are talking about moneys, and as the Scottish Office talked about exercising commercial judgment, Opposition Members have a right to challenge the Government's commercial judgment in introducing this new clause which, by implication, means that they will


be responsible for solving the SSEB's debt to the extent of billions of pounds. We were told that there were problems with the financing of British Coal, so we are entitled to question the Minister on how he can reconcile the commercial jugdments that he talked about with his proposal to solve the SSEB's debt to the extent of several billions of pounds.
The Secretary of State for Energy has been more forthcoming than the Scottish Office Minister. I give due credit to the right hon. Gentleman. He tried to be helpful, but I cannot say that about the Minister who is to reply to the debate. Like a parrot, he repeated that it is a matter for commercial judgment. As moneys are involved and as we are talking about commercial judgment and the commercial viability of the SSEB, we are entitled to hear the Minister explain the implications.
I should love to debate the matter in greater detail, but I do not want to stray too far. We are talking about moneys and the deep-mine coal industry and their implications in relation to the debt. I hope that the Minister will let us know what the coal burn really is and what the present stage of the negotiations is. He cannot say that he does not know. He has been in close contact with it and has said that he is responsible for the SSEB. He must know what is happening. The Minister's reply will be closely scrutinised by my hon. Friends. In deference to you, Mr. Deputy Speaker, I leave it at that, but we want information, and information we must get this evening.

Mr. Foulkes: I am not too sure how knowledgeable you are about the geography of Scotland, Mr. Deputy Speaker, but in case you are not fully aware, the Minister—

Mr. Deputy Speaker: Order. I inform the hon. Gentleman that I spent 18 months at royal naval air station Abbotsinch, HMS Sanderling at the end of the war.

Mr. Foulkes: I am grateful for that information, Mr. Deputy Speaker. You will be fully aware that the Minister, the hon. Member for Galloway and Upper Nithsdale (Mr. Lang), represents a constituency which is contiguous with mine, Carrick, Cumnock and Doon Valley. The name of his constituency is almost as unwieldy as mine, but his constituency is equally as beautiful. We know him well, not only in the House but in the south-west of Scotland. When we think about the Minister, the two words that most commonly reach our lips are —

Mr. Brian Wilson: Small majority.

Mr. Foulkes: No, not "small majority" but "smooth" and "bland". I am sure that you will agree, Mr. Deputy Speaker, that the Minister was very smooth and particularly bland in introducing the amendment in his usual low voice, quickly glossing over what he described as technicalities. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) and I said, and as even the proportionally represented hon. Member for Gordon (Mr. Bruce) agreed—that is quite a spectrum of opinion to start with—the amendment has some substantial implications, and I wish to ask a few questions about them.
First, as the Minister said, the prime purpose is to ensure that the parent company cannot escape the liabilities of the subsidiary. But what about the other way

round? I hope that the Minister will answer that question. New clause 6 seems to demonstrate that some aspects of the licence conditions are not intended to apply to subsidiary companies. For example, apart from generation and supply, licence conditions could be avoided by using a subsidiary company to perform certain tasks. I hope that the Minister will check that. If that were to be the case, it would be a worrying loophole, and I hope that the Minister will consider doing something about it. If there is no loophole, I hope that he will give an assurance to that effect.

Mr. Lang: I shall deal with that specific point now in a way which I hope will reassure the hon. Gentleman. If he reads the new clause, he will find that it is concerned solely with the activities of nuclear generating companies.

Mr. Foulkes: I am grateful for the Ministers intervention, but I am not totally reassured by it. There are still activities in which nuclear generating companies will be involved. By allocating tasks to a subsidiary company, the supply and generating companies could avoid their legal liability.
That is not a party political point. Therefore, it is in the public interest for hon. Members to be assured that the provision is watertight. I hope that the Minister will consider that.
Secondly, nuclear costs are a major matter. There is still uncertainty about nuclear debt, and there are provisions for write-off. We are suspicious about the position in Scotland. The huge, almost entirely nuclear, debt in Scotland of £2·7 billion is almost exactly the equivalent of what the Government might expect to get from the floatation of the companies. Therefore, there is a major incentive for the Government to use taxpayers' money to write off the debt. As usual in respect of privatisations, we are concerned about that matter. It is an abuse of taxpayers' money.
Opposition Members are concerned also about the other costs which, in the past and even at present, have been greatly underestimated. I refer to the two additional nuclear costs. One is the disposal of the waste and the second is the decommissioning of the power stations which are vital and central to the amendment.
I know that my hon. Friend the Member for Cunninghame, North (Mr. 'Wilson) has a particular constituency interest in the closure of Hunterston A and will in no way trespass on his responsibility. I know that he is deeply concerned about employment in his constituency and the implications of its proposed closure. Some of my constituents work at Hunterston, so I share his concern. However, I have been suspicious about the entire episode. I shall use the phrase of the singer Max Bygraves, "I wanna tell you a story", about Hunterston A.

Mr. John Home Robertson: Will my hon. Friend sing it?

Mr. Foulkes: No, I certainly will not sing it. That would empty the Chamber even further.
I am sure that my hon. Friend the Member for Cunninghame, North, as I do, receives weekly reports from the South of Scotland electricity board about the operation of Hunterston A and Hunterston B. Those reports tell us who is visiting, who has had slide shows, and what incidents there have been. I must confess that they are scrupulous in defining and giving information about


incidents that have taken place. Those weekly reports were telling the success story of Hunterston A—how well it was doing, how efficient and marvellous it was, and what a long-term future it had. Then suddenly there was an announcement that the SSEB was to close it.
I waited then with anticipation for the next weekly report from the SSEB. Of course, it was a model of careful writing and one had to read between the lines to get to the truth. It was probably written by my old friend Tom James. Clearly, the stated reason for the closure of Hunterston A had nothing to do with the real reason, which is why I intervened earlier.
I accept completely and unreservedly the Minister's assurance that it is now the Government's intention to say that the costs of the decommissioning of Hunterston A must be taken on by Scottish Nuclear Limited. However, I also know Donald Miller. I have known him over the years as deputy chairman and as chairman. I know his persuasive power and the way he keeps on going. As my hon. Friend the Member for Midlothian (Mr. Eadie) said, he is like a tiger on the question of the coal contract with British Coal.
I have discussed with Donald Miller, too, the cost of decommissioning. He said that he believes that the cost of decommissioning is finite, it can be calculated, and that he has made an allowance for it. I confidently predict that he has it wrong. He has underestimated and the cost will be much greater. There has not been a full decommissioning of a Magnox power station in this country or elsewhere, and it must still be decided whether it will be dismantled piece by piece, whether it will be encased in concrete, or what will happen. All the options must be considered.
The cost of dealing with that decommissioning is a major problem. I predict that pressure will be put on the Government to get the taxpayer to take on board some, if not all, of the cost of decommissioning and other costs, too. I hope that the Government will stick to their guns and that it will not be the taxpayer who takes on that responsibility. As privatisation approaches and the Government realise the real cost, they will become increasingly worried about the burden around the necks of the companies soon to be privatised. The only explanation that I can envisage for the early closure of Hunterston A is that the Government are looking for some way of getting that debt taken on by the taxpayer and not taken on by the future private company.
My second point concerns the site at Chapeldonan in my constituency, which is a designated site that has been owned by the SSEB for more than a decade. The SSEB has said that it will build a nuclear power station there. It is a blight on the area around Girvan. At Girvan the development of the town is constrained on the west side by the sea and on the south and east sides by hills. The only place where housing and industry can be developed is to the north, but that site is owned by the SSEB and has been reserved for a nuclear power station. Over the past few years, Kyle and Carrick district council and myself as the local Member of Parliament—

Mr. Home Robertson: And Councillor Struan Stevenson.

Mr. Foulkes: As my hon. Friend said, Councillor Struan Stevenson, the ex-leader of the Conservative group

on Kyle and Carrick district council, as well as the Labour councillors, have been anxious to get the SSEB to declare Chapeldonan surplus to requirements. It will not need another nuclear power station. The hon. Member for Gordon and my hon. Friend the Member for East Lothian (Mr. Home Robertson) know that Torness power station was not needed and that it provided capacity well in excess of demand. It will certainly not need Chapeldonan.
What I do not understand from the new clause is who will take over the ownership of the Chapeldonan site if it is not sold before privatisation. Will it be the SSEB, the new privatised company, or will it be its subsidiary? [Interruption.] The more my hon. Friend the Member for Glasgow, Pollok (Mr. Dunnachie) waves his finger, the longer I will take, because it distracts me. Or will ownership be taken over by Scottish Nuclear Limited? 
That is an important issue and that is the reason why I wrote to Donald Miller at the SSEB saying that the only advantage of privatisation—it sticks in my gullet a little to say this—is that it has made the people who are generating and will generate power look seriously at the costs. My hon. Friend the Member for Midlothian has said that nuclear power is not cheap, as the Government previously pretended—it is more expensive—and they have now realised that. I hope that we shall reach the stage when the SSEB will say that the Chapeldonan site is no longer required and that it can be sold and used for much needed industry and housing developments in the Girvan area.
My fourth and penultimate point—

Mr. Wilson: My hon. Friend has missed the third point.

Mr. Foulkes: My third point was Chapeldonan. If my hon. Friend were able to count, I am sure that he would know that.
My fourth point is that Chapelcross near Annan is an anomaly. The Minister said that the legislation applies to power generation in Scotland, but in Chapelcross there will be the anomaly of a nuclear power station based in Scotland, but providing electricity for an electricity supply company based in England. I am not sure how the provisions of the new clause and some of the other Scottish provisions in the Bill will apply to that situation. Will they apply to the siting of the establishment or the siting of the company that owns and operates that establishment? The question of cross-border relationships is an important one.
What is interesting is that the SSEB suddenly decides to close Hunterston and that British Nuclear Fuels plc decides to replace Chapelcross. One begins to suspect in those circumstances that many strange things are going on and that other factors are involved, as I have already shown in the case of Hunterston. It is also interesting to consider the other factors relating to Chapelcross, such as the pressures arising from the requirement for the supply of plutonium for weapons as opposed to power generation. Tritium is also provided at the related plant at Chapelcross and there is intense pressure on Chapelcross because of America's shortage of tritium and the relative shortage of plutonium.
Those of us who live in the south-west of Scotland are a bit fed up as we are becoming surrounded by nuclear establishments which are of no benefit to the local inhabitants, including the Minister of State, who lives not far from me. Those establishments are creating additional hazards and problems for us.
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I am concerned about the Bill in general. I appreciate that the new clause is a belated attempt by the Government to patch up some of the difficulties, but it creates further difficulties. Today I have highlighted my suspicions and worries. I hope that the Minister will take the opportunity of this important debate to try to answer some of our concerns; otherwise we shall seek more occasions in the next few days, weeks and months to pursue our concerns until we get the answers, which are especially needed by the people of south-west Scotland.

Mr. Home Robertson: I share the views expressed by my hon. Friends the Members for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and for Midlothian (Mr. Eadie) about the tough practices of the present chairman of the South of Scotland electricity board. Some might say that the chairman has used sharp practices to manage that board. It is tempting to consider that a privatised SSEB could not possibly behave as badly as the present board. One could cite a number of examples of such behaviour, such as the way in which the board has handled the coal contract. In my constituency we have the bizarre situation in which large quantities of coal, which have been shipped halfway around the world from China, are being burnt at Cockenzie power station when the necessary coal to feed the grid could easily be mined from the Scottish coalfields.
I wonder whether the nuclear subsidiaries will enjoy the same facilities as the present SSEB and get a year's holiday from the rates? The Minister will be aware of my correspondence with him about how the SSEB has managed to take advantage of the rather curious provisions dealing with the rating of public utilities. On 25 May 1988 in one of the famous press releases to which my hon. Friend the Member for Carrick, Cumnock and Doon Valley has drawn attention, the SSEB claimed credit for contributing electricity to the grid from Torness in my constituency. In July 1988 it confirmed that it was putting 682 MW into the national grid. On 1 October 1988, however, the SSEB signed a certificate and submitted it to the assessor of public utilities in Scotland to say that it was generating nil at Torness, and hey presto—that ensured that it avoided paying more than £1 million in rates for the coming year. That is one way to fix the books in preparation for the privatised regime.
Much has been said about the fact that Scotland has a substantial excess of generating capacity over its peak demand and it is relevant to understand the background to that. I am acutely aware of that extra capacity because it has arisen since the construction of Torness nuclear power station in my constituency. When the decision was taken to go ahead with the construction of that nuclear power station there were many predictions of increased demand for electricity. There was also a general acceptance of the bland assurances given over the years that nothing could go wrong at nuclear power stations. Since then, one or two accidents have raised doubts about their safety record. Of greater significance to this debate is our experience of 10 years of a Government who have run down British industry and reduced the demand for energy despite the fact that we have the capacity to produce energy efficiently in Scotland.
A graphic example of the rundown of industry was the closure of the Invergordon aluminium smelter. I understand that we now import more aluminium than Invergordon could ever have produced, but in allowing

that smelter to close down the Government wrote off one part of the Hunterston power station. That is a curious way to manage our economy and our long-term energy policy.
Nuclear installations function in my constituency and in that of my hon. Friend the Member for Cunninghame, North (Mr. Wilson) and there is widespread public concern that those power stations must be run efficiently and safely. That concern will run through this debate.
Much has been said about the cost of decommissioning nuclear power stations, but we should also consider the obvious additional costs of running nuclear power stations to the high standards to which it is imperative that they keep if we are to avoid the sort of accidents that have occurred abroad and, indeed, in Britain. Apart from the ongoing cost of running a power station and the cost of decommissioning such a station, there is also the cost of insuring against accidents at nuclear power stations.
Perhaps the Minister will say what provision has been made for insuring the operators of nuclear power stations in Scotland against the consequences of accidents, large or small. Will the parent company or the subsidiary company be able to indemnify people who may be affected by the emission of radioactive material or as a result of a serious accident at a nuclear power station? The House will not be surprised to discover that that is a matter of considerable concern to my constituents in the Torness area following what happened at Windscale in 1957, at Three Mile Island and, more recently, at Chernobyl. Things can go wrong and massive disruption and massive costs can result.
It would be useful if the Minister could tell us how the operators of the nuclear power stations under the new regime will be able to ensure that such costs can be met in all circumstances. Will the Government insist that the operators idemnify the people affected?

Mr. Alex Salmond: In the light of all that we now know about the development of the Torness power station, does the hon. Gentleman regret his original support for the project?

Mr. Home Robertson: Frankly, yes. In recent years I have put that on record several times. At the time when the decision was taken to construct Torness nuclear power station, there was increasing demand for electricity, there were credible forecasts of a need for a new generating capacity in Scotland and evidence was not publicly available, as it is now, of the possibility of serious accidents. Be that as it may, however, Torness nuclear power station has been built and commissioned and it would be absurd to try to turn the clock back now.
The people of East Lothian, Cunninghame, where Hunterston is located, and throughout Scotland are fighting to ensure that in the future the generating plants are operated safely to the highest possible standards. We must also ensure that we have the right economic climate to enable us to take advantage of the power potential in Scotland, whether that means the oil industry, the coal industry, hydro-electric power or nuclear power. Scotland has the capacity to be the power house not only for its own economy, but for the entire United Kingdom. What we require from the Government is the framework to make that possible.

Mr. David Winnick: On a point of order, Mr. Deputy Speaker. Will there be a statement about Sir Leon Brittan who, when interviewed for


television, stated that the then Solicitor-General's letter was leaked on the express approval and authority of the Prime Minister's private secretary and press secretary, Mr. Bernard Ingham? There seems to be a contradiction between what the Prime Minister told the House and what Sir Leon Brittan has said on record. The integrity of the Prime Minister is at stake—

Mr. Deputy Speaker: Order. The hon. Gentleman has gone far enough. I have heard of no request for permission to make a statement to the House on that or any other matter.

Mr. Wilson: I should have been quite happy for my hon. Friend the Member for Walsall, North (Mr. Winnick) to proceed. I am sure that it would be gratifying for all Opposition Members if, at last, the chickens were coming home to roost for the Prime Minister's men. As far as the Prime Minister's Scottish men are concerned, once again we are having an important Scottish debate without the presence of one solitary Scottish Tory Member other than the Minister.
I do not wish to extend this debate long as it has already continued for longer than most of us expected. Although I am speaking from the Dispatch Box, the point that I wish to dwell on, while highly relevant to the new clause, relates particularly to a constituency issue of my own, to which reference has frequently been made in the debate—the proposed closure of Hunterston A nuclear power station in my constituency.
It is worth noting that the SSEB, in framing its announcement, was careful to talk of the "possible" closure of Hunterston A nuclear station, which is of the Magnox design and has been in operation for the past 25 years. I cannot help feeling—particularly when I look at the new clause—that Hunterston A and, by definition, the people who work there are caught up in a fairly high-powered game of poker in which the stakes played for are intricately involved with the privatisation of the electricity industry and what is to be done with the nuclear content. That is objectionable. The record of Hunterston A is second to none—it is the most efficient of the United Kingdom's Magnox stations. The record of its work force is also second to none, having given extremely loyal and diligent service for the past 25 years. I recently visited the Hunterston A station and was given absolutely no clue of any proposal to close it.
My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) was absolutely right—the announcement was completely unexpected. I believe, as does the work force, that the station is but a pawn in the privatisation game, the outcome of which is not yet known. The real reason for Hunterston's closure, we are led to believe, is the increase in its operating costs, due particularly to British Nuclear Fuels' imposition of higher charges for the reprocessing of spent fuel.
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The Minister, in his bland way, said that this was a technical matter and had nothing to do with the substance of electricity privatisation, but he has an obligation to say what considerations will be involved in the technical announcement contained in the new clause. The financial sums involved are truly enormous. The decommissioning of Hunterston A will probably cost about £250 million to

£300 million. Despite the questions that have been posed and partially answered in this debate, I still want a clear-cut statement from the Minister when he sums up about who will carry the costs of the decommissioning and about the relationship between the timing of the announcement of the possible closure of Hunterston A and the passage of the Bill through the House.
The logical consequences of the position of Hunterston A go far beyond that station and my constituency. As we understand it, the SSEB's concern, as a result of the high costs being charged by BNFL, is not primarily with Hunterston A but with the two advanced gas-cooled reactor stations, Hunterston B and Torness. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) pointed out, it appears from the evidence given to the Select Committee on Energy that the SSEB and its successor may be tied to a contract with BNFL which would impose exactly the same cost disadvantages on Hunterston B and Torness as those which led to the threatened premature closure of Hunterston A.
The Minister must say, within the context of new clause 6, whether the costs of decommissioning Hunterston B and Torness on account of a high-cost regime operated by BNFL can also be expected. He should say whether the story in The Scotsman of 8 March was founded in fact. Under an exclusive label, Chris McLaughlin reported that the tentative agreement reached between the SSEB and the Scottish Office was partly based on a review of the contracts that will govern the future relationship, after privatisation, with British Nuclear Fuels plc. Has a deal been made between the Government and BNFL on the relationship between the SSEB's successor and that company or is it possible, as predicted in the "Power in Europe" article published in the Financial Times, that continuing cost burdens will be imposed on Hunterston B and Torness in the form of high charges imposed by BNFL?
The Minister has a good opportunity today to take this matter out of the realms of journalistic theorising, leaked exclusives or the word of a "senior Scottish Office source" and give the House a definitive statement about the position. I need hardly say that the future of Hunterston B power station is of immense importance. It is of even greater importance to my constituency and that part of Scotland than Hunterston A, which may close within the next few years. As the Minister said earlier, we are talking about a decommissioning process which will continue for at least 100 years—150 years has been suggested to me as the time scale involved before the core reactor can be removed from the Hunterston A site. We are talking about a time far into the future, and about continuing costs and implications for the communities around Hunterston A.
I was surprised and disappointed that the announcement of this possible prospective closure should have come so unexpectedly, without rehearsal and with minimal notice to the work force and, so far, with so little information about the implications being given to the communities around Hunterston A. I want the relevant questions to be answered tonight. It is not good enough for the Minister to say that this is merely a technical clause. It carries on its back substantial financial and practical implications for Hunterston A in my constituency, for nuclear generation in Scotland and for electrical generation throughout Scotland. The Minister should take this opportunity to give us some answers.

Mr. Lang: On the small peg of this technical new clause it has been possible to hang quite a wide-ranging debate on the Scottish electricity industry, particularly in the context of nuclear energy, and I make no complaint about that. It has been a useful debate, in which a number of valid points have been made, with which I shall try to deal. One or two of the looser points may, of course, be picked up in our later debate.
I will refer first to a group of points which may be characterised as involving financial aspects such as debt and write-off, to which the hon. Member for Glasgow, Garscadden (Mr. Dewar) and others have referred. Listening to the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), I was struck by the feeling that when we talk about debt some Opposition Members seem automatically to think that we are talking about something disastrous and unsatisfactory which is the result of incompetence, profligacy or some kind of rake's progress arising from unprofitable trading. In fact, we are talking about debt that has been incurred deliberately for a specific purpose, is being re-serviced and will be repaid. Such debt is to provide for investment, and it is investment in assets that has put the Scottish industry in such a strong position as it faces up to privatisation.
It clearly makes sense for the successor companies to have continued access to the national loans fund while they are still wholly owned by the Crown in the period leading up to flotation. The current limit of £3 billion on the boards' borrowings will be maintained. The two Scottish boards currently have debts of around £2·8 billion, arising from successive investments in new plant, most recently at Torness. About £2·3 billion of the debt is incurred by the SSEB and about £500 million by the north board. That investment puts the industry in Scotland in a strong, healthy position to move into the private sector, and removes uncertainty about its prospects.
The hon. Member for Garscadden asked about the European Investment Bank borrowings and other debts. Those loans will be redeemed and converted into national loans fund debt, available at a rate of interest more attractive than from commercial sources. I expect the industry to be no worse off as a result in terms of the interest burden prior to capital restructuring.
We shall first establish the Scottish nuclear company on a wholly equity-funded basis in the ownership of the two Scottish electricity companies. We shall then go to establish an appropriate capital structure for those two plcs by converting some national loans fund debt into Government equity in the form of share capital and reserves. The rest will be converted into debentures. Such capital restructuring is an established business practice and will result in a combination of debentures, issued share capital and reserves which will replace the Scottish industry's extinguished liabilities pound for pound in the companies' books. In the meantime, the Government will continue to fund the industry's requirements for capital from the national loans fund.
We shall go on to dispose, on flotation, of part or all of the Government's equity by selling shares in the Scottish electricity companies. The amount that we obtain in proceeds will depend on market conditions at the time, and may or may not cover the nominal value of shareholders' funds invested in the business. What is important is that the shares on flotation are successfully marketed at a price

above their nominal value. We shall choose the capital structure best calculated to maximise returns to the Exchequer and hence to the taxpayer.
Debt will not be written off in the sense of obliteration. Here I repeat a point that was discussed more than once in Committee—this measure will not discharge the obligation to repay. It is not like a bankruptcy or liquidation, in which payment is made in the form of only a few pence in the pound. In the establishment of the capital structure of the companies prior to flotation, debt will be replaced by a mixture of debt and equity geared to market requirements. The sums owed to the NLF will be replaced pound for pound by debentures, share capital and reserves.
The hon. Members for Garscadden and for Gordon (Mr. Bruce), and one or two others, asked whether the cost of decommissioning nuclear stations would be paid for by the consumer or by the taxpayer. I consider it entirely appropriate for the customers to pay the knows costs of generation, whether nuclear or otherwise, as they have already done in relation to Hunterston A, and the SSEB has made provisions for decommissioning and for waste disposal.
We recognise, of course, that long-term changes in costs should not be met in full by future consumers. That is why clause 90 and schedule 12 allow a Government contribution. We have consulted closely with Donald Miller and his colleagues in the nuclear industry about uncertainties associated with some aspects of nuclear back-end costs, and the concerns to which they may give rise following privatisation. The powers that we have taken in clause 90 and schedule 12 have been drafted in the light of those consultations and are designed specifically to provide a framework to meet those concerns. The chairman of the SSEB shares my confidence that the Scottish industry, including its substantial nuclear assets, can look forward to a bright commercial future. He has been closely involved in discussion of the proposals, and has recently indicated his satisfaction with the progress of negotiations, although clearly a number of points of detail remain to be resolved.

Mr. Dewar: Is the Minister saying that since the original consultation which led to the drafting of the Bill no further reassurances, agreements or guarantees have been given that are unknown to the House? Is he saying that there is nothing in the reports that have appeared in The Scotsman about further reassurances and undertakings on what he elegantly calls "back-end costs"?

Mr. Lang: I think that I can reassure the hon. Gentleman. We have continuing contacts at both official and, occasionally, ministerial level with the chairmen of both the north and the south hoards. I had a meeting with both chairmen only last Friday, when they signed the agreement to replace the joint generation agreement. There has, however, been no secret deal, no special patched-up arrangement, that has not been made plain to the House or provided for in the Bill. Clause 90—which I seem to recall was clause 88 in an earlier version—has been in the Bill since its inception. Any suggestion of a private arrangement or hidden agenda is entirely misplaced.
Like the nuclear industry in the south, the Scottish industry already makes substantial provisions for decommissioning, waste disposal and other anticipated costs. At present, the SSEB has some £764 million


provided for in that context and further provision of about £58 million for short-term debts. It is significant that last year it was able to adapt without great difficulty to the changes resulting from Chapelcross and the increased costs that that brought, as well as the costs arising from a change in the reprocessing charges of BNFL.
The powers in the Bill provide a backstop whereby the Government can meet unexpected, uncontrollable and substantial cost escalations arising well after the relevant electricity has been consumed, which might impose an unwarranted burden on the industry's future. It is, however, the industry's responsibility to meet the full known costs of nuclear generation and to make appropriate recovery from today's consumers.

Mr. Wilson: I am sure that the Minister is as anxious as we are to get this firmly on the record. I quote again the report in The Scotsman of 8 March:
Neither side was prepared to reveal details of the talks, but the key element is understood to be assurances on the contracts which fix ceiling levels on the amount of any unforeseen rises in nuclear costs and in the contracts which will govern the relationship after privatisation with British Nuclear Fuels Limited.
Is that true or false?

Mr. Lang: I am not answerable for what appears in The Scotsman. I am sure that Opposition Members find stories in The Scotsman with which they are familiar, and which they consider as inaccurate as some of the stories that I quote from that paper.
As I have said, the chairmen of the boards are in regular touch with our officials, and from time to time with Ministers. Matters concerning the boards are discussed, clarified and resolved. There has been no separate, secret deal or special arrangement—of the kind suggested by The Scotsman—in our negotiations. There has been nothing of that sort which is not already known by the House.
The hon. Member for East Lothian (Mr. Home Robertson) raised the subject of insurance. The industry makes provision for self-insurance against material damage—for example, to its stations—through its mutually owned subsidiary. On third party risk cover against accidents, the industry is required to insure itself for liabilities up to a certain level, which could obviously vary in the light of changing circumstances. Beyond that, under the nuclear legislation, the Government are liable up to a further threshold, and beyond that there is the possibility that Parliament could be asked to grant further cover and indemnity if that were considered necessary. The arrangement is similar to those prevailing throughout Europe and in the United States.
The hon. Member for Carrick, Cumnock and Doon Valley referred to Chapeldonan, and I understand his constituency interest in that location. Whether or not the next power station in the SSEB's area will be nuclear and, if so, when it will be built obviously depends on future growth and demand and on the relative costs of nuclear and other fuels. I think that it is a point of universal agreement—perhaps one of the few points of universal agreement—that at present there is very substantial over-capacity in the industry in Scotland. The building of another nuclear station in the immediate future, or even in the next few years, therefore seems unlikely.
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Identification of suitable sites for possible future power station development is a matter for the SSEB, and the Government have no power to instruct the board on its holding of land. In fact, the SSEB was unsuccessful in discussions to acquire land at Hunterston from the BSC, and, for the time being at least, that land is ruled out as a possible future site. The board intends to retain the land at Chapeldonan as a strategic option for possible future use. Its judgment is that surrendering the site could prejudice the future provision of economically priced electricity in Scotland. On the other hand, it has made it clear that, given changing circumstances, it would be willing to consider seriously any sympathetic development that might be proposed.

Mr. Foulkes: Surely the Minister agrees that this cannot go on for ever, that at some point the Government must decide whether a power station should be built or whether the land should be released for other purposes. The area is blighted, so no one will come forward with specific suggestions for development. Surely Ministers have an overriding responsibility to say to the electricity board, "Make up your mind—if you do not intend to use the land within the next five years, or even the next decade, you must release it for other purposes." Will the Minister give serious consideration to that suggestion?

Mr. Lang: It would be a mistake to put pressure on the company to make a decision. A decision taken too soon, under pressure of that kind, could be the wrong one. I think that the hon. Gentleman exaggerates the relevance and importance of the site to Girvan. It is an important and useful site, but it is not the only one available for the kind of development that the hon. Gentleman has in mind. Moreover, the board has said that, given changing circumstances, it would look sympathetically at the possibility of considering specific proposals put to it.
I was distinctly puzzled by some of the remarks of the hon. Member for Gordon (Mr. Bruce)—specifically, his reference to the profligate extravagance that had gone into the building and commissioning of Torness. As the decision to go ahead with Torness was one of the few valuable outcomes of the Lib-Lab pact, the hon. Gentleman must be castigating his own party as much as anyone else. I agree with him that Scotland has substantial excess capacity. One might argue about whether it is 110 per cent. or less, but I suggest that it is the result of nationalised industry planning and that once the industry is returned to the private sector we may look forward to a more positive and efficient planning approach and the avoidance of that kind of situation.

Mr. Malcolm Bruce: I wish to refer to a consumer point which was raised earlier. The Minister made no reference either to the Director General of Electricity Supply or to the shareholders of privatised companies. May we have an assurance that in the private sector the industry will take account of legitimate risks taken by the shareholders and that the companies will not be given carte blanche to pass on to the consumer the cost of their mistakes? The director general might well say, "You made a commercial decision and you made a mistake, so your shareholders and not the consumer must take the risk."

Mr. Lang: The hon. Gentleman is complaining of precisely the situation that we have now. Every wrong


decision taken by every electricity board or company in the past few years has been passed on and is being borne by the consumers, and quite a lot of mistakes have been made. Under the regulation arrangements and the activities of the director general, there will be a far more disciplined and competitively oriented approach, which will lead to a more efficient appraisal of the need for the commissioning of new power stations.
The hon. Gentleman's comparison between Hunterston A and Torness seemed to me to be wholly misplaced. I shall come in a moment to his specific point. At this stage, I should say that the proposition that Hunterston A should somehow have been kept open and that Torness should not have been built is extraordinary. Hunterston A is a very much smaller power station. It is now coming towards the end of its commercial life. It is reaching a stage where the economic considerations are becoming paramount. That is why closure was considered. The loss of generating capacity resulting from the closure of Hunterston A will be taken up by Torness not just on its normal design rating output, but on its higher-thannormal design rating output—in other words, because it is working more efficiently than the original design anticipated. The cost of decommissioning Hunterston A, like all the other foreseeable nuclear costs, is already being provided for within the accounts of the industry.
I accept that, from the point of view of the hon. Member for Cunninghame, North (Mr. Wilson), this is a constituency matter of great importance. As the decommissioning process goes ahead, there will clearly be a continuing need for a considerable number of workers. I hope, and expect, that the impact on the unemployment figures in that constituency will not be so substantial as some people fear. Torness, which is coming on stream, will be an efficient, clean and economical way of generating and delivering electricity.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) revealed not only the split within the Social and Liberal Democratic party over nuclear matters, but also the inherent inaccuracy of the posture of the hon. Member for Gordon. The most absurd proposition of all to which the Liberal party and the Scottish National party have subscribed is that Torness should be sold. If that were done, we should be looking forward to an English company owning Torness and selling back to Scottish consumers electricity that had been generated in Scotland. That seems to me to be a quite extraordinary proposition.
I have not yet said anything about coal, which to some Members—indeed, to the whole House—is a matter of very considerable interest and concern. It is of particular concern to the hon. Member for Garscadden and to the hon. Member for Midlothian (Mr. Eadie), who raised the issue of coal burn. As the hon. Gentleman knows, the amount of coal burnt in Scotland for electricity generation is very much smaller than the amount burnt in England. Nevertheless, it seemed to my right hon. and learned Friend the Secretary of State for Scotland, and indeed to my right hon. Friend the Secretary of State for Energy, that a solution to the negotiations between the coal board and the South of Scotland electricity board could be achieved0—a solution that would secure, in Scotland, the use of coal in substantial quantities for a considerable period.
As a result of the commercial negotiations between those two bodies, agreement has been reached on quantity and duration—2 million tonnes per year—but not yet on

price. Price is an important component of any agreement, but we have made considerable progress in those negotiations. Of course, the duration of the contract is linked with the interconnector, which we may have an opportunity to debate further on the next group of amendments. I emphasise that the negotiations must be between the two boards, and must be conducted in a commercial manner. Only in that way can the best interests of the consumer be served.
As to whether the coal is to be opencast or deep-mined, that too must be a matter for the boards. At present something like half, or even more than half, of the coal mined in Scotland is open cast. That enables British Coal to sell more coal at a more competitive rate. The interests of the consumer and the interests of the industry in Scotland have to be taken very seriously into account. It would be quite wrong to force on British Coal and on the electricity board a solution based on coal priced higher than was necessary simply because it was all deep mined.

Mr. Eadie: I want to be perfectly clear about what the Minister is telling the House. In the course of his reply, he talked about commercial judgment and a commercial decision between the two parties. He said earlier that he and his right hon. and learned Friend the Secretary of State felt that there should be some sort of agreement and understanding. Is he saying that an agreement has been reached, but that some details have yet to be filled in and that the matter will be settled in the boardroom rather than in the courts? Can the Minister give the House an assurance on that point?

Mr. Lang: I cannot give the hon. Gentleman an assurance that matters will be settled in the boardroom rather than in the courts, since it is essentially a matter for the coal board and the electricity board. I am saying that progress has been made and that agreement has been reached on two important components of any deal. I hope very much—I believe that it is possible—that agreement will be reached on the third component. Certainly the pressure of the deadline of 31 March has now been lifted.
We have had a wide-ranging debate, hung on the peg of a narrow and essentially technical new clause. I was reassured that during the debate there was no criticism of the structure of the new clause, and I commend it to the House.

Question put and agreed to.

Clause read a Second time, and added to the Bill.

New Clause 2

DEPUTE DIRECTOR IN SCOTLAND

`There shall be a depute director general of electricity supply who shall carry out the functions of the Director an Scotland. He shall have his office in Scotland and shall be responsible to the Secretary of State of Scotland.'.—[Mr. Dewar.]

Brought up, and read the First time.

Mr. Dewar: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker (Miss Betty Boothroyd): With this it will be convenient to discuss the following: New clause 15—Director General of Electricity Supply—
`There shall be appointed an. Officer, to be known as the Scottish Director General of Electricity Supply, who shall be responsible to the Secretary of State for Scotland and shall


assume all of the functions of the Director as they relate to Scotland and to the activities of the Scottish electricity companies.'.

Amendment No. 153, in clause 62, page 46, line 13, at end add—
`(c) one which shall be designated as the Scottish export company which shall be wholly owned by the two Scottish electricity companies in (a) above and which shall have responsibility for selling any surplus electricity generated in Scotland.'.

Amendment No. 150, in clause 62, page 46, line 30, at end add—
`(6) The two Scottish Companies shall establish a Scottish Electricity Research Trust. They shall provide funds of not less than 5 per cent. on net profits. The Secretary of State in consultation with the Director shall appoint 10 Trustees who shall have the responsibility of administering the Trust. The Trust shall carry out or commission research into the environmental effects of supplying electricity in Scotland, alternative sources of electricity suitable to the terrain and climate of Scotland and the most economical use of electricity generated.'.

Mr. Dewar: I am aware of the fact that there is a lot of business to be done tonight. Therefore, I shall be extremely brief and I hope that the House will forgive me if I confine my remarks to new clause 2. Some of my hon. Friends may wish to refer to other matters that are dealt with in this group.
I shall deal with the comparatively simple proposition that Scotland should appoint a depute director general of electricity supply whose remit would be to look after Scottish interests. The new clause takes its form from our first preference—exhaustively debated in Committee, thanks to the efforts of my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton)—that Scotland should have a regulator. That was not accepted by the Government. As the matter was exhaustively debated, there is little point in returning to it. However, we invite the House to write into the Bill a safeguard that has been verbally given. It is common ground between me and the Minister that a Scottish official should work within the Director General of Electricity Supply's organisation, that he should be charged with responsibility for Scotland and that he should be based in Scotland. As that has been conceded, a provision ought to be included in the Bill to take account of that point. It is very much in that spirit that the new clause has been tabled.
The protection of the consumer and the proper regulation of the industry are matters of enormous sensitivity and importance. I hardly need to remind the Minister of that fact. We are handing over an industry in which, as Ministers have hurried to tell us, the competition will never be classic. A public utility is to be replaced by a private monopoly. In those circumstances, it is important that adequate protection for consumers should be provided and that the different structure of the Scottish industry should be taken fully into account.
That need has been dramatically highlighted during the last few weeks with the announcement of an 8 per cent. increase in Scottish electricity prices for the next financial year. That has already been heavily criticised. Mr. John Banham, the director general of the Confederation of British Industry, has referred to the Budget strategy being wrecked by the Government scoring inflationary own goals. He went on to say:

It is all the more irritating to business when the rises are seen to be totally unnecessary.
He linked that reference particularly to the news about the price rises in Scotland. The case for strong regulation of the public interest is made by these events. I hope that the Minister will comment on the reasons for the increase. Such a comment is relevant since we are considering the kind of regulation that is needed and the need for the new clause.
I remind the Minister that Scotland has always been told that it has low-cost, competitive power, that it has made a big investment in nuclear power, that it is in a strong competitive position and that privatisation is good news for the consumer. There was no question about a non-fossil fuel obligation. That was an academic point in Scotland's case. It could look forward to a very much happier future, by implication, than that to which those south of the border could look forward because of the pressures there.
There is genuine puzzlement on this side of the House and in Scotland generally about that statement. The Minister made a big virtue of the fact that the return on capital expected of the electricity boards in Scotland would be 2·7 per cent., rising in 1988–89 to 2·8 per cent., while in England the return on assets, valued on the current cost basis, would be 4·75 per cent. Given that tremendous gap, it is extraordinary that Scotland should face a far more substantial increase than that which will be imposed south of the border.
It is a sad comment on this Government's bona fides that, during the last year, the electricity consultative councils have protested in the strongest possible terms about a wage settlement—which, in their view, is both inflationary and unnecessary—that is being inflicted on the Scottish people.
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The electricity consultative council for the north of Scotland has expressed "deep disappointment" over the rise. It said:
Members have valiantly tried to persuade the board"—
that is the North of Scotland Hydro-Electric Board—
to limit any increase on the standard domestic tariff.
However, they were unable to do so. I have in my hand the press release by the electricity consultative council for the south of Scotland. It refers to its disappointment about
the continuing deterioration in comparative electricity prices in the area of the SSEB compared with those in England and Wales where the proposed increases average 6.5 per cent.
It goes on to say:
The council was concerned about the possible effect of privatisation on SSEB costs and their impact on tariffs. There is continuing worry about interest charges associated with Torness and with the very substantial nuclear generating capacity in Scotland and concern about future nuclear charges in terms of fuel reprocessing and decommissioning.
The general pattern emerges of a substantial increase in charges—much higher than those in England—at a time when the preliminary advertisements for privatisation suggested the very opposite. It has been carried through in the teeth of strong opposition from the Government's own appointed consumer watchdogs. That makes the case for the new clause.
The Minister referred to the fact that, with the chairmen of the two boards, he took part in a little ceremony on 31 March when he commended the progress towards privatisation and witnessed the endorsement of certain operational agreements by the two boards. As I


look through the pious expressions of satisfaction that the Minister published in his Scottish Office press release, I cannot help but reflect on the fact that on 30 March—the day before—the 8 per cent. price increase had been announced. The Minister did not see fit to comment on or to explain why Scotland had to face such an increase. On the evidence that is available to us, we believe that the increase is unjustified. It is part of the price that we are being asked to pay for privatisation.
The Minister's performance has been completely unsatisfactory. He has let down his own consumer bodies—as they have made very clear. In those circumstances, consumer protection must be placed at the top of our agenda. We ought to insist on the new clause. It is not what we wanted originally, but it would provide some protection. The need for such a clause has been made doubly relevant by the sad news about prices during the past few weeks and also by the clearly perceived danger that standards will be allowed to slip and that vigilance will be dropped, given the potential for abuse that privatisation will provide.

Mr. Malcolm Bruce: Although I support new clause 2, I prefer new clause 15. The character of the Scottish industry is such that there ought to be a separate director for Scotland. However, the thrust of both new clauses suggests that. Scotland's distinctive character should be recognised within the new arrangements.
As for the 8·5 per cent. price increase, I believe that Scotland has fallen down the crack as between the responsibility of a nationalised industry and an about-to-be-privatised industry. Any Minister who was doing his job properly by defending consumer interests—he is the only person with the power to do so—would have refused to allow an increase of that kind in advance of privatisation. The economic criteria do not justify it.
He should have been so embarrassed by it as to recognise that he must either resist the increase or explain it. He has done neither. We are worse served with no Scottish director and with such a Minister than we might have been had the situation been reversed. I cannot believe that if a Scottish director had been in place he would have allowed the increase to go through. He would certainly have investigated the matter thoroughly and, unless there was a legitimate reason for the increase, he would have told the electricity companies to think again.
The Minister knows perfectly well that I am not opposed to privatisation in principle. The structure of the industry as it stands is both uncompetitive and unresponsive to the consumer—these increases prove it—but all this reinforces my belief that we should restructure the industry in the public sector and prove that we can open it up to effective competition before we move it out of the public sector. The Minister has completely failed either to accept his responsibility to defend the consumers' interest or to ensure that, in privatisation, we are creating a structure in which the distinctive and different character of the Scottish industry is taken fully into account.
I know that other hon. Members wish to speak and I do not want to delay the House. I feel that the clauses are both appropriate and relevant, and I shall certainly support them.

Mr. Hood: In my speech on Second Reading I forecast that this Bill, along with the poll tax and the privatization

of health care and the water industry, would be one of the large nails in the Government's coffin at the next general election. I am pleased to say tonight, having sat through almost all the 156 hours of the Committee, that experience confirms my view that this is indeed the case. I am particularly pleased to see the Secretary of State in his place today.
My hon. Friend the Member for Ashfield (Mr. Haynes) counted the number of hours that the Secretary of State managed to put into the Committee; I am sure that the Secretary of State knows this but, in case he does not, he was there for 23 of the 156 hours. Never once, however, when he was there, or when the Under-Secretary of State—who looked so unconvincing throughout the whole of the Committee stage—was there, did he justify in any way the privatisation of the electricity supply industry.
The whole case is based on myths—the myths of the market, the choice of the consumer and, the one that takes the biscuit, the fact that electricity will be cheaper. At all these three hurdles the Government's argument fell flat on its face. When it came to Scotland, not only did the Government not have a case, not only were they weak, but they were pathetic.
In Committee we had five Scottish hon. Members, my hon. Friends the Members for Glasgow, Cathcart (Mr. Maxton) and for Glasgow, Rutherglen (Mr. McAvoy) and myself, representing Labour, and two from the Liberal Democrats, the hon. Member for Gordon (Mr. Bruce) and the hon. Member for Berwick-upon-Tweed (Mr. Beith). Some of us were interested to note that the Scottish National party was not represented on the Committee. We are informed that its members were offered a position on the Committee and refused it. That says a lot about their so-called rhetoric on the matter of their interest in the Scottish coal industry.

Mr. Salmond: The hon. Member for Clydesdale (Mr. Hood) has trailed his coat, but he does me less than justice. He must be aware that I spent a year on this matter in the Select Committee on Energy. After reading his speeches, and those by his hon. Friends in the Standing Committee, and seeing all the ammunition with which they were provided, I just wish that they had utilised the time a little better.

Mr. Hood: I am as little impressed by the absence of the hon. Member for Banff and Buchan (Mr. Salmond) from the Committee as by the comments that he has just made. His party is coming to be known as the "walk out, throw out or abstention" party.
The fear of hon. Members on the Opposition Benches is that privatisation of the electricity supply industry will spell the death of the Scottish coal industry, a fear which has not been dissipated by the news that we have heard tonight, when last week we were under the impression that an agreement had been made with the South of Scotland electricity board. That so-called agreement seems flimsier than ever. I am sorry that the Secretary of State for Scotland is not here. Certainly, the Secretary of State for Energy is here. The Minister took some of the credit—if that is the word for it—for getting the parties round the table. I do not believe that for one moment. I do not believe that the Secretary of State for Scotland did anything to get the parties round the table.
Far be it from me to cast any praise in the direction of the Secretary of State for Energy, but some of us on the Opposition Benches firmly believe that the impetus came


from the Secretary of State for Energy and not from the Secretary of State for Scotland. When the latter was criticised for his lack of action in Scotland, it was even worse than that—he should be criticised for his collaboration, because some of us believe that he was collaborating with the SSEB from day one of the dispute. This is no credit to him at all. He is becoming known as an enemy of Scotland and as a traitor to Scotland. Our history has seen many of those but the Secretary of State seems to be competing for the mantle of arch traitor to Scotland.
He is not on his own in competing for that mantle. I had occasion to intervene during a speech in Committee by his hon. Friend the Member for Tayside, North (Mr. Walker), who unfortunately is not with us tonight.

Mr. John Maxton: He is in Australia.

Mr. Hood: I do not know where he is. He was nick-named "Bill from Brazil" earlier, but he is not here tonight.
In Committee the hon. Member for Tayside, North said:
It is essential that the United Kingdom takes advantage of all its natural resources, including the supply of energy. It is therefore in the best interests of the whole of the United Kingdom that Scotland's ability to pass its surplus energy resources to England where there is a demand, is an essential part of our future energy policy. Energy policy has to be United Kingdom policy, and—this is the point that I have been trying to make—as a Scot I find it disturbing when we hear language that is wrapping tartan round the Scots and asking for special privileges.
The hon. Member then went on to say:
England has an unsatisfied demand. It is therefore in the best interests of the whole of the United Kingdom to have an adequate ability to transfer.
At this stage I intervened to point out to him:
I am tempted to be impressed by the hon. Gentleman's desire to look after the interests of the United Kingdom. But is he aware that the Secretary of State has been negotiating with the French Government to import French energy into this country and that it will work against a United Kingdom country—Scotland?
To this the hon. Gentleman responded:
We have been negotiating with the French and anyone else who wants to buy our electricity. I am a believer in the market place. It makes sense to be able to transfer electricity both ways.
We had to remind the hon. Gentleman that the French were interested not in buying electricity but in selling it.
I am sorry to bore the House with these quotations but this will be the last. The hon. Member for Tayside, North went on to say:
Opposition Members should study carefully what I have said"—
I can assure the House that we have done that—
and they will see that my view is we must have a flat playing field so that throughout the United Kingdom there is an opportunity for all consumers to share in the strengths or weaknesses of the whole."—[Official Report, Standing Committee E, 23 February 1989; c. 1227.]
There we have it: the hon. Member from the Flat Earth Society, the hon. Member for Tayside, North.
Following on an albeit modest contribution from myself, the hon. Member later accused me of special pleading for the Scottish coal industry. He even accused

me of using intemperate language, believe it or not. Hon. Members here, with perhaps one exception, would certainly not agree with such an accusation.
I certainly make a plea for common sense and not dogma, for compassion and not hostility, and for consensus not dictatorship. This Bill is all about the dogma of extremism, hostility to miners in mining communities and dictatorship over the Scottish people who do not want and will never want Toryism.
The case for the Scottish coal industry is set in concrete; it is sound on all grounds. We hear much about the problems of the environment. Scottish coal is low in sulphur—far lower than the coal that we are importing from South Africa, Columbia and China. We have vast untapped reserves. Scottish coal is cost-effective when compared with the high cost of power generated by nuclear energy.
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I have a particular interest in opencast mining because in my constituency I have the largest opencast development in the whole of Europe. Opencast has to be seen in Scotland for what it is and not as it is seen in England. Opencast and deep mining are under the same management in Scotland—British Coal (Scotland). Opencast must not be seen as a replacement for deep-mined coal, as the hon. Member for Bedfordshire, North (Sir T. Skeet) suggested in Committee, but as complementary to it.
May I anticipate the hostility to deep-mined coal by those who favour the expansion of opencast mining? The prices of deep-mined coal and opencast coal are aggregated. There is cross-subsidy, which I accept. One important ingredient is forgotten by the people who are hostile to deep-mined coal and who favour the expansion of opencast mining—the co-operation of local authorities in giving permission to develop opencast mines in areas where there would normally be hostility to it. There is a strong relationship between mining communities and local authorities which leads to support for opencast mining.
We have 400 years of coal reserves in Scotland. We prefer to develop those coal reserves rather than rely on importing coal or highly expensive nuclear power. We do not want privatisation of electricity in Scotland. It is obscene, nonsense and irrelevant to our power generation requirements. Amendment No. 153, tabled by myself and hon. Friends, would ensure an export market for Scottish-generated power. That is necessary for the future of Scotland as a country and an energy producer. We sat for almost 156 hours in Committee addressing that and many other issues.
On Second Reading I referred to the disgraceful spectacle of the Prime Minister tripping through the Lobbies in support of private ports Bills with what I termed as the "Botha boot boys" behind her. I forecast then the demise of Tory Members in constituencies including mining communities, especially in places like Nottingham. The Government are going down the spout with the privatisation of water. Electricity privatisation is another nail in their coffin. That is one funeral that I look forward to attending.

Mr. Salmond: I support new clause 15, which would lead to the establishment of a specific Scottish director general of electricity supply. I am disappointed at the retreat of the Labour party from the position that was


established by the Select Committee on Energy in favour of a Scottish director general which it supported in Committee. I do not think that a depute director general is adequate to serve the real needs of Scotland.

Mr. Maxton: In some way the hon. Gentleman is remarkably naive in the workings of the House. If the Labour party had put down exactly that new clause, I think I can give him the assurance, even if you would not, Madam Deputy Speaker, that it would not have been called.

Madam Deputy Speaker: Order. I give an assurance to all hon. Members that there is no new clause or amendment on the Amendment Paper that is not perfectly proper.

Mr. Salmond: I think that you have answered the point for me, Madam Deputy Speaker. May I point out to the hon. Member for Glasgow, Cathcart (Mr. Maxton) that new clause 15, which proposes exactly that, is on the Amendment Paper. In the absence of new clause 2, it would have been possible to vote on it. If the hon. Gentleman's argument is that we should propose only amendments or new clauses that are acceptable to the Government, that would limit substantially the ability of the Opposition to put forward amendments.
The argument against a deputy director general and against new clause 2 was made in Committee by the hon. Member for Cathcart. He said:
I do not see how a dispute between a Scottish board and an English generating board or an area board or company about supply, generation and price will be settled. Will a deputy in Edinburgh, who is responsible to the Secretary of State for Scotland, he more responsible to the Secretary of State for Scotland than to his immediate boss, the director general sitting in London, whose primary responsibility will be to the licences that he has granted to the various English companies? To which one will he be responsible? Nothing in the Bill explains this."—[Official Report, Standing Committee E, 12 January 1989; c. 72.]
That is right. Nothing in the Bill explains it; of course, nothing in new clause 2 explains it either. I much prefer the position established in the Select Committee on Energy.

Mr. Thomas McAvoy: Will the hon. Gentleman make it clear to the House whether the Scottish National party was offered a place on the Electricity Bill Committee and whether it refused to take that place—yes or no?

Mr. Salmond: As I have already pointed out in reply to the hon. Member for Clydesdale (Mr. Hood) a few moments ago, I spent a year on the Select Committee on Energy considering these very issues. I was surprised at the suggestion that the SNP was not interested in deep coal mining in Scotland. Yesterday I received a letter from the general secretary of the National Union of Mineworkers in Scotland thanking me for my efforts on its behalf in the Select Committee. The fact that there is no Scottish Labour Member on the Select Committee on Energy does not lead me to the conclusion that Scottish Labour Members are not interested in the coal mining industry or in energy issues in general.
I was making the point that I much prefer the position established by the Select Committee on Energy on the need for a Scottish director general of electricity supply. I am the only Scottish Member on the Select Committee on Energy. The majority of members are English

Conservative Members, yet we reached a unanimous conclusion after a good deal of debate. In the report we said:
we believe that Scotland's interests will best be served by the establishment of a separate Scottish Regulator, working closely with his English and Welsh counterpart, with regular interchanges of information and staff. The relationship between the Scottish Office and London Departments is an analogy. In this way the distinctive structure of the ESI in Scotland will be mirrored by a distinctive regulatory structure.
It is a remarkable feature of the position of the Scottish Office on the issue that it is not even willing to propose, for the benefit of the Scottish consumer, a level of protection that was insisted upon by English Conservatives on the Select Committee on Energy. It is remarkable that Scottish Office Ministers were not willing to make that point.
The arguments that the Select Committee considered in coming to our conclusion in favour of a separate Scottish director general were, first, that we recognised that within the Scottish structure of the proposed privatisation of electricity there would be no effective competition. Indeed, many would argue that within the English and Welsh structure there will be no effective competition. Certainly, with the duopoly that is proposed for Scotland—with territorial monopolies at any rate for tariff customers—there will be no genuine competition.
Hence the need for protection for Scottish consumers, who otherwise will be exploited by the private electricity companies which will succeed the SSEB and the Hydro Board. Our first point was to recognise the distinctive nature of the Scottish privatisation and of the Scottish electricity system, and the need for special protection for the Scottish consumer.
Secondly, we concluded that there would be occasions when the Scottish exporters of electricity would be in conflict with their English customers. Early on in the Select Committee deliberations, we received evidence from Mr. Harris of the east midlands board. He said that his board would prefer that the grid bought electricity collectively from the Scottish electricity companies because that would lower the price at which electricity would be bought. When we took evidence from Mr. Miller of the SSEB, he argued that tens of millions of pounds could be involved in that issue alone. Indeed, the Secretary of State for Scotland agreed, when giving evidence to the Select Committee that this was an important pricing issue.
If there is a conflict of interest between the Scottish producers of electricity and the English supply companies—the consumers of that electricity—how will a single director general divide his loyalties? Will he be in favour of Scottish producers or English consumers? Hence the importance of having, for the protection of Scottish consumers and Scottish producers of electricity, someone who will not owe his loyalty to a Director General of Electricity Supply located in London.
The third argument which impressed the Select Committee was in relation to the needs of the north of Scotland. We argued strongly in our report that it was not just a matter of a common tariff throughout the Hydro Board area; we had to consider also the need for subsidies for future connections. I see the hon. Member for the Western Isles (Mr. Macdonald) in his place. A pensioner couple in his constituency proved to be an excellent example of the need for protection in terms of connection charges for consumers in remote areas.


That pensioner couple, on Lewis, were 35 yards from an electricity connection, yet the Hydro Board told them that it would cost them over £3,000, and that, I understand, was the second, revised—and hence lower—price that they were quoted. When the Secretary of State for Scotland appeared before the Select Committee, he seemed to take the view that that pensioner couple had situated their house in the wrong place. He appeared to say that it was their fault for not being nearer than 35 yards to the nearest power connection.
I accept that the legislation guarantees a price for anyone whose home is situated within 50 yards of a power connection. But that is a theoretical right for most consumers, certainly if we are to have charges of £3,000 or more for a 35-yard connection. The Select Committee took the view that, the needs of remote areas of Scotland were not satisfied by existing connection arrangements alone and we said that the development of such areas, with new houses and more people, would occur only if new connection charges were reasonable. That would be a key responsibility of a Scottish director general.
7.15 pm
In Standing Committee, the Minister of State argued that a single director general at United Kingdom level having a dual responsibility would not be a problem, even though he would be responsible both to the Secretary of State for Scotland and to the Secretary of State for Energy. The Minister of State argued that the Government spoke with one voice, claiming that both Secretaries of State spoke on behalf of the Government.
It was an interesting concept. Can we expect the two Secretaries of State to speak with one voice on these matters? That question was put to the test a few weeks later when, on 25 January, I questioned the Secretary of State for Energy about whether it was likely that the main office of the United Kingdom Director General of Electricity Supply would be located in Scotland. After conceding that he had not given the matter a great deal of thought, the right hon. Gentleman decided—off the cuff and in front of the Select Committee—that his answer should be no. I asked him why not, and he replied:
Because we believe that he"—
the Director General of Electricity Supply—
will have a duty to Scotland, but he will also have a duty to England and Wales, and that is far and away the biggest part of his job.
The right hon. Gentleman went on to use a phrase that he may now regret using. When I argued that the Select Committee might take a different view, he said that that was unlikely, and he described as "an eccentric notion" my argument that the director general's main office should be in Scotland.
The Secretary of State for Scotland appeared before the Select Committee a few weeks later, on 22 February. I thought that, as the two Ministers were said to speak with one voice on Government policy, it would be interesting to ask him similar questions. The Secretary of State for Scotland did not seem to believe that it was "an eccentric notion". He said that, on the contrary, it was not an issue on which the Government had reached a conclusion, and he added:
It is not a word that I would have chosen
when asked if my argument was an eccentric notion. The right hon. Gentleman seemed sympathetic to the idea of

having the office located in Scotland, and I have subsequently been in correspondence with the Minister of State, who has assured me that the Government have an open mind on the issue.
We can see the fallacy of the contention that there is no problem in having dual responsibility, the belief that the director general can report, on the one hand, to the Secretary of State for Energy and, on the other, to the Secretary of State for Scotland. The Government argue that there is no difference between the views of the two Secretaries of State, but even on that issue, when questioned before the Select Committee, we saw a substantial difference of view.
In those circumstances and with the conflicts of interest that might arise in the electricity supply industry, all Members representing Scottish constituencies must wonder whose view will prevail. I have no doubt that it will be the view of the Secretary of State for Energy, and the Scottish Office will tag along behind and try to reconcile the position at a later date.
It was said earlier that the recent price increase of 8 per cent. announced for the Scottish electricity industry represents an outstanding example of why we need a Scottish director general with responsibility, power and authority to intervene on behalf of the interests of Scottish consumers. That is particularly important in view of the suggestion that somehow the deal that has been arrived at between British Coal and the SSEB might have been the cause of these price increases. I heard the Minister of State suggest on the radio a few days ago that that deal might have been responsible for such sharp price increases.
The figures show that his view is nonsense. In the last three years, there has been a 28 per cent. decline in the real price charged for coal supplies to the SSEB. Indeed, the price charged for coal is only a fraction of the SSEB's overall costs. In the same three years, according to evidence given to the Select Committee by the SSEB, there has been an unexpected increase, costing the SSEB £240 million, in the nuclear costs of fuel reprocessing, waste treatment and decommissioning.
If we had a Scottish director general in Scotland, nobody—not the Minister or the SSEB—would be allowed to get away with misleading explanations for an over-the-odds increase in electricity charges, such as giving the impression that a minor and declining part of the SSEB's costs can be held responsible for such an exceptional increase in charges. A Scottish director general is necessary so that Scottish consumers can be told the truth about their electricity bills and protected from unreasonable increases in future.
Everything about the legislation—the lack of competition and the vulnerability of Scottish consumers surely leads us to the conclusion that Scottish consumers need the maximum protection in the privatised structure. That protection should be provided by a Scottish director general with the full authority and prestige of that position. He should be nobody's deputy, nobody's office boy, but a Scottish director general reporting to the Secretary of State for Scotland. I very much hope that we shall be able to vote on new clause 15.

Mr. McAvoy: I am well aware of the constraints of time. I only wish that previous contributors had paid some attention to them. I have no intention of dealing with any of the points raised by members of the Scottish National party. The comments of the hon. Member for Banff and


Buchan (Mr. Salmond) were counter-productive. When we agree about so much, his pejorative and speculative attacks invite response, and I am certainly not prepared to listen to his remarks without replying. The hon. Gentleman and other Members of his party make great play of trying to get on to Committees and interfering with the processes of the House, yet when they were offered a place on the Standing Committee considering the Electricity Bill they refused that opportunity. Having refused an opportunity to participate in the processes of the House, they have no credibility whatever when they try to disrupt those processes.
Opposition Members who took the opportunity to work on behalf of the people of Scotland repeatedly made the point that all logic and fairness pointed to the need for a separate Scottish director general. The Minister of State, Scottish Office, made great play about the unionist and separatist arguments, but every move that the Government make reinforces the sentiment that Scotland will not have a fair deal from England within the British structure. Paradoxically, the so-called Scottish Conservative and Unionist party is the main driving force in encouraging resentment against the union which the majority of Opposition Members favour.
The integrated monopoly status of the electricity industry in Scotland and the fact that the public monopoly is to become a private monopoly demonstrate the need for a separate Scottish director general. Within the set-up envisaged by the Government, there is no clear responsibility for the privatised Scottish industry. The Select Committee on Energy observed that Scotland is different and there should have been a separate Bill. New clause 2 would at least ensure that there would be a director general for Scotland answerable to the Secretary of State for Scotland.
The pricing impact requires a strictly Scottish approach. Scottish consumers will pay a price based on United Kingdom average generating costs, not on Scottish generating costs which are lower. Because of the weather and climatic conditions, Scottish consumers already incur higher costs than elsewhere in the United Kingdom. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said in Committee that Mr. Donald Miller, the chairman of the SSEB, was supporting a single United Kingdom director general. My hon. Friend rightly suggested that Mr. Miller's support was at least partly based on the hope that privatisation would be a vehicle for maximising profits for his privatised company, which presumably would result in extra payment to him personally.
There is a desperate need for a director general concerned directly with Scotland, especially when we consider what has happened before privatisation. The SSEB increased prices by 8 per cent.—a greater increase than in England and Wales, and more than was necessary to keep in line with inflation. That is what has happened under the direction of Mr. Miller without the benefits, as he would see them, of a privatised structure.
A further demonstration of the need for a Scottish director general is the ludicrous situation between SSEB and British Coal. A great deal has been said about that and some important points have been raised. If Mr. Miller seeks to minimise costs for the SSEB, perhaps he should reduce the legal costs incurred in such disputes. Conservative Members may say that the situation between the SSEB and British Coal shows that there is no need for

a Scottish director general because two Scottish institutions are in dispute and the presence of the Secretary of State for Scotland did not prevent the development of such a damaging dispute. That is absolutely right. The Secretary of State's presence had no effect and the political world could not have an impact on the dispute because, disgracefully, the Secretary of State for Scotland did not see fit to intervene in a matter which was causing damage to Scotland. If we had a truly independent Scottish director general, it is inconceivable that he or she would not have intervened on behalf of the Scottish people.
The philosophy of privatisation is the free market and the survival of the fittest. The hon. Member for Banff and Buchan rightly mentioned that if there are commercial disputes between the Scottish producers and the English and Welsh consumers, according to the free market philosophy on which the privatisation is based, it is inevitable that England and Wales will have greater influence. According to the Government's philosophy, might is right, so England and Wales will have more voice and that will count against Scotland. That is the clear logic of the Government's privatisation policies. New clause 2 tries to protect Scottish interests from a Tory Government who have no support in Scotland for their Bill.

Mr. Calum Macdonald: In speaking in favour of new clause 2 I shall endeavour to keep my remarks as brief as possible by focusing on one part of Scotland and on one specific problem. I wish to focus on the Highlands and Islands of Scotland, covered by the North of Scotland Hydro-Electric Board, and the problem of ensuring the supply of electricity to remote areas of the Highlands and Islands at a reasonable cost.
The hon. Member for Gordon (Mr. Bruce) said that it might seem odd that the Highlands and Islands had a very high percentage of connections compared with other parts of the United Kingdom. Despite the remote locations of many of the properties, a great number of them have been connected over the years. That is due to the unique ethos that has governed the hydro-electric board since its inception and given it a determination to provide electricity to remote areas at a reasonable cost and to spread the costs, which would otherwise fall very hard upon particular individuals in remote areas, among consumers and taxpayers in the locality.
In recent years there has been a second factor to explain the wide extent of electricity connection in the Highlands and Islands—the availability of finance from the EEC through the European regional development fund, which has been channelled into the North of Scotland Hydro-Electric Board to enable it to connect people living in remote rural areas.
The Bill will do away with both factors which enable those living in remote areas to be connected to the electricity supply, because privatisation will do away with the private status of the North of Scotland Hydro-Electric Board and make it a privatised company. The board will thus lose access to the EEC money that it has had until now. I deeply regret that the Government have chosen to go ahead with the privatisation and did not take the step that they took in regard to the privatisation of Caledonian MacBrayne, which had a similar EEC financial status. When they realised that that finance would be lost, they abandoned their privatisation plans. I wish that the Government had taken the same route with the North of Scotland Hydro-Electric Board.
I wish to put the case for my constituents. The hon. Member for Banff and Buchan (Mr. Salmond) has already mentioned the problems that they face, although he did not cite the worst examples to be found in my constituency of individuals requiring electricity and having to pay extraordinary and impossible sums to obtain it. In one community in my constituency, a household has been asked to pay £63,000 to receive an electricity supply—a sum that is clearly way beyond the means of the couple who occupy the house. In case the Minister thinks that a nouveau riche couple have moved into the Highlands and Islands, I will tell him that the couple lived there long before the hydro board was established. They have been bypassed by the age of electricity.
7.30 pm
Another significant case is that of Mr. MacDonald living in the village of Balallan. He did not choose to build a new house in an impossibly remote and inaccessible area. In fact, the new house is only 35 yards from the mains electricity supply at the edge of one of the largest villages in my constituency. Yet he is being asked to pay more than £3,000 for the privilege of receiving electricity. In Committee that case was put to the Minister very ably by my hon. Friend the Member for Makerfield (Mr. McCartney). The Minister's reply was that if Mr. MacDonald waited two or three years there might be a reduction in the price to £1,500 or so. As my constituent is 78 years old, that was not the most gracious of suggestions.
The publicity given to the case by various newspapers and by my hon. Friend the Member for Makerfield has stung the North of Scotland Hydro-Electric Board. It has actually produced a booklet relating to the case, which has been sent to every Scottish Member of Parliament and to every newspaper in Scotland, because it is so fearful of the adverse publicity that it has been receiving. That seems to suggest that the board at least has a guilty conscience.
The first thing that one sees in the booklet is a "Summary of Activity" which stretches over a year and a half, but it is clear that nothing was done by the board in that year and a half to help my constituents to receive their electricity. All that happened was that a series of letters were sent explaining why my constituents could not receive electricity. In letters to me, the chairman of the board has made it clear that after privatisation consumers in remote areas cannot expect to receive any help from the general body of consumers in relation to connection and supply. That statement shows the future facing remote areas after privatisation. The ability to receive electricity will depend how remote one is from the mains electricity supply and it will come down simply to ability to pay.
I have mentioned only a minority of cases in the Highlands and Islands, but hundreds of properties in the area face such obstacles. That is why I, my constituents and others fear the effects of the Bill.

Mr. Lang: The House would have had more sympathy with the hon. Member for Western Isles (Mr. Macdonald) if he had acknowledged that under the arrangements that we are introducing the successor company to the hydro board will be required to set a common tariff precisely to benefit his constituents. He might also have acknowledged the virtual completion by the industry, with Government

and European assistance, of the supply network. He might have acknowledged the existence of the uneconomic rural development programme which the board has operated.
The hon. Member referred to the Balallan case. Although the sum of £3,100 may seem large, it is already £600 lower as a result of the negotiations with the board. Someone proposing to build a new house in such an area —we are not talking about an existing house—would take such a figure into account. Indeed, the applicants were told when they sought planning permission what the cost of supplying electricty would be. Therefore, the hon. Gentleman might have been more forthcoming on some of the details of the circumstances affecting the Western Isles and the consumption of electricity there.
The wording of proposed new clause 2 suggests that a deputy director general of electricity supply should be directly responsible to the Secretary of State for the regulation of the industry in Scotland. This would remove from the director general the duties which the Bill lays upon him in relation to Scotland and would effectively result in a separate regulator. New clause 15, proposed by the hon. Member for Banff and Buchan (Mr. Salmond) goes one step further and prescribes the appointment of a scottish director.
It is quite clear to us that neither case would be beneficial, since both new clauses ignore the fact that the Scottish companies will be competing in a British market. We are clear that two separate regulators would be inefficient; would fail adequately to monitor common carriage arrangements and fair trading practices across the border; and would lose the opportunity for yardstick comparisons across the whole British industry to bring out best practices and provide leverage for increased efficiency. Our proposal for a deputy director general in Scotland reporting direct to the director general, who in turn reports to the Secretary of State, ensures that the Scottish industry has the best of both worlds: a representative of the director general based in Scotland, but still part of a single regulatory regime. New clause 15 is therefore unnecessary as well as impracticable.
Neither do I see any need for the detailed structure of the director general's organisation to be set out in the Bill as new clause 2 suggests. The Bill rightly restricts itself to describing the functions and responsibility of the director general, as the regulator of the single British market. The director general will be appointed jointly by the Secretaries of State for Energy and for Scotland and be responsible to both Secretaries of State. There is no need for the Bill to provide for the details of the director general's office. The House is well aware of the categoric assurances it has been given on a number of occasions that the director general will have reporting to him a deputy director general based in Scotland. That arrangement is quite different and is preferable to the confused view set out in the new clause.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) and others referred to prices. They made the mistake that all Socialists seem to make on such occasions. They assume that the Government decide what the prices should be. That may have been the case under the Labour Government, but it is not the case under this Government. Such matters are decided by the industry and, in determining tariffs, the industry must take account of a range of factors including cost structure and the need to make an adequate return on assets employed.
The tariff increase in Scotland in 1988–89—4·75 per cent.—was significantly lower than in England and Wales


where prices ranged in their increase from 7 per cent. to 12 per cent. The recently announced tariff increases in Scotland for this year of 8 per cent. from 1 April are slightly higher than in England and Wales but still lower than the average increases last year south of the border. The tariff increase in Scotland is greater this year than last, principally because of the effect of higher rates of inflation on operating costs generally, but also reflecting the higher than anticipated fuel costs—both nuclear and coal. Even with the latest increase, tariffs in Scotland are 9 per cent. lower in real terms than in 1982–83. One can compare that with the record of the last Labour Government, when tariffs rose by 20 per cent. in real terms.
Tariffs are primarily a matter for the boards to decide and in determining the level, they have to take into account a complex range of financial and operational factors, including the financial targets agreed with the Government. The financial target for 1989–90 is 2·7 per cent., set jointly to reflect the board's shared responsibility for nuclear generation. That holds the target at broadly the same level as it has been for the past two years.
There is no reason why tariffs should go up as a consequence of privatisation. Privatisation of the two companies will lead to increased efficiency and thus, in time, to lower prices. Competition in the broadest sense and private sector disciplines will put downward pressure on the costs that go into consumers' electricity bills. Where a monopoly will remain, prices to the consumer will be subject to strict and fair regulation and there will be downward pressure through the price condition. The restructuring proposals will create two companies satisfactorily balanced in terms of the mix of generating plant, spare capacity and forecast levels of profitability. Any tariff divergence will, therefore, relate substantially to the effectiveness of management decisions rather than simply to the structure.
The hon. Member for Clydesdale (Mr. Hood) referred to coal. I must point out to him that since we came to power, we have put over £1 billion a year in deficit and non-deficit grant into the coal industry. Nobody can say that we have not taken full account of our responsibilities in that regard. Equally, it is quite wrong to imagine that prices are uninfluenced by the price of coal. If the SSEB were forced to take coal at a high price, there would clearly be implications for the price of electricity.
The hon. Member for Banff and Buchan (Mr. Salmond) quoted the Select Committee on Energy on the question of a separate regulator, but he neglected to record the Select Committee's view that the arguments for and against a separate regulator were finely balanced. We feel that they are substantially weighted towards a single Great Britain regulator, but we took account of the Select Committee's arguments in reaching a conclusion. We also note with interest that both the boards in Scotland favour a single director general and that the electricity consultative council for the south of Scotland stated:
Regulation in Scotland needs to be an integral part of the UK system of regulation while recognising the different circumstances of the industry in Scotland.

Mr. Salmond: Of course the Select Committee considered the arguments for and against carefully, but the conclusion it came to was for a separate Scottish regulator. The Minister has not yet answered the question why, given that he found other aspects of the Select Committee report

so useful, he did not take that recommendation on board. Incidentally, the Select Committee had only one Scottish member.

Mr. Lang: We took account of the recommendations of the Select Committee, but we also took account of other viewpoints and aspects of the matter that were relevant and important in reaching the conclusion that I described a few moments ago. The new clause will do nothing for consumers in Scotland. Consumers in Scotland will derive benefits from the rights that the Bill will give them, the competition that will be introduced through the privatisation of the industry, the downward pressure of the regulator and the more efficient operation of the industry in the private sector. Those are the ways in which the rights of consumers will be best protected, so I urge the House to reject the new clause.

Mr. Maxton: I shall be brief, as I am aware that the House wants to bring this debate to a conclusion.
I must say to the hon. Member for Banff and Buchan (Mr. Salmond) that the Labour party now accepts that every time a Scottish National Member speaks here, or anywhere else, his target is not the Government or the Conservative party, but the Labour party. The Scottish nationalists know that it is in their political interest to ensure the return of a Conservative Government rather than a Labour Government at the next general election. The Scottish nationalists are interested not in the people of Scotland, but only in their own cheap political ends. That is what the hon. Gentleman's speech was about.
We would prefer first not to have any privatisation of the electricity supply in Scotland. Our second preference is that there should be a wholly separate directorate and our third is new clause 2. We believe that only a separate Scottish director or one who is responsible to the Secretary of State for Scotland, whether a deputy or not, can ensure that the special needs of the Scottish industry and of the Scottish consumer are protected.
It is strange that just a week before the boards announced their price increases, for which the Minister disclaimed all responsibility, the Scottish Office, in the name of the Secretary of State, put out a release saying:
The Secretary of State for Scotland has agreed a financial target for 1989–90 with the South of Scotland Electricity board and the North of Scotland Hydro-Electric Board.
It is beyond belief that the Minister can argue the he has no responsibility for the price increases when he is setting the financial targets for the boards. What the Minister has said differs strongly from what the chairman of the North of Scotland Hydro-Electric Board, Mr. Joughin, said when referring to the 8 per cent. price increase that his board was introducing. He said:
These price increases are designed to ease the path towards privatisation.

Mr. Lang: The chairman of the North of Scotland Hydro-Electric Board claims that he was misquoted and that he did not say that.

Mr. Maxton: It is the easiest opt-out in the world to claim that one was misquoted. I am sure that all of us, at one time or another, have tried to claim that when we have said something that we regretted. I have spoken to Mr. Joughin and others and I am sure that his original remark was the correct view.


We believe that the Scottish industry should never be privatised and that there should be a director who is responsible for it. We are not satisfied that assurances given by Tory Ministers mean anything in terms of final promises. I call on my hon. Friends to join me in voting for the new clause.

Question put, That the clause be read a Second time:—

The House divided: Ayes 205, Noes 266.

Division No. 140]
[7.46 pm


AYES


Abbott, Ms Diane
Dunwoody, Hon Mrs Gwyneth


Adams, Allen (Paisley N)
Eadie, Alexander


Allen, Graham
Eastham, Ken


Alton, David
Evans, John (St Helens N)


Archer, Rt Hon Peter
Ewing, Harry (Falkirk E)


Armstrong, Hilary
Ewing, Mrs Margaret (Moray)


Ashley, Rt Hon Jack
Faulds, Andrew


Ashton, Joe
Fearn, Ronald


Banks, Tony (Newham NW)
Field, Frank (Birkenhead)


Barnes, Harry (Derbyshire NE)
Fisher, Mark


Barnes, Mrs Rosie (Greenwich)
Flannery, Martin


Barron, Kevin
Flynn, Paul


Battle, John
Foot, Rt Hon Michael


Beckett, Margaret
Foster, Derek


Beith, A. J.
Foulkes, George


Bell, Stuart
Fraser, John


Benn, Rt Hon Tony
Fyfe, Maria


Bennett, A. F. (D'nt'n &amp; R'dish)
Galbraith, Sam


Bermingham, Gerald
Garrett, John (Norwich South)


Bidwell, Sydney
Garrett, Ted (Wallsend)


Blair, Tony
George, Bruce


Blunkett, David
Gilbert, Rt Hon Dr John


Boateng, Paul
Godman, Dr Norman A.


Boyes, Roland
Graham, Thomas


Bradley, Keith
Grant, Bernie (Tottenham)


Bray, Dr Jeremy
Griffiths, Nigel (Edinburgh S)


Brown, Gordon (D'mline E)
Griffiths, Win (Bridgend)


Brown, Nicholas (Newcastle E)
Grocott, Bruce


Brown, Ron (Edinburgh Leith)
Hardy, Peter


Bruce, Malcolm (Gordon)
Haynes, Frank


Buchan, Norman
Healey, Rt Hon Denis


Buckley, George J.
Heffer, Eric S.


Caborn, Richard
Henderson, Doug


Callaghan, Jim
Hinchliffe, David


Campbell, Menzies (Fife NE)
Hogg, N. (C'nauld &amp; Kilsyth)


Campbell, Ron (Blyth Valley)
Home Robertson, John


Campbell-Savours, D. N.
Hood, Jimmy


Carlile, Alex (Mont'g)
Howarth, George (Knowsley N)


Cartwright, John
Howells, Dr. Kim (Pontypridd)


Clark, Dr David (S Shields)
Hoyle, Doug


Clarke, Tom (Monklands W)
Hughes, John (Coventry NE)


Clay, Bob
Hughes, Robert (Aberdeen N)


Clelland, David
Hughes, Sean (Knowsley S)


Clwyd, Mrs Ann
Illsley, Eric


Cohen, Harry
Ingram, Adam


Coleman, Donald
Janner, Greville


Corbett, Robin
Johnston, Sir Russell


Corbyn, Jeremy
Jones, Barry (Alyn &amp; Deeside)


Cousins, Jim
Jones, Ieuan (Ynys MÔn)


Crowther, Stan
Kennedy, Charles


Cryer, Bob
Kilfedder, James


Cummings, John
Kinnock, Rt Hon Neil


Cunliffe, Lawrence
Lambie, David


Cunningham, Dr John
Leighton, Ron


Darling, Alistair
Lewis, Terry


Davies, Rt Hon Denzil (Llanelli)
Litherland, Robert


Davies, Ron (Caerphilly)
Livsey, Richard


Dewar, Donald
Lloyd, Tony (Stretford)


Dixon, Don
Lofthouse, Geoffrey


Dobson, Frank
McAllion, John


Doran, Frank
McAvoy, Thomas


Douglas, Dick
Macdonald, Calum A.


Duffy, A. E. P.
McFall, John


Dunnachie, Jimmy
McKay, Allen (Barnsley West)





McKelvey, William
Rooker, Jeff


McLeish, Henry
Ross, Ernie (Dundee W)


Maclennan, Robert
Ruddock, Joan


McWilliam, John
Salmond, Alex


Madden, Max
Sedgemore, Brian


Mahon, Mrs Alice
Shore, Rt Hon Peter


Marek, Dr John
Skinner, Dennis


Marshall, David (Shettleston)
Smith, Andrew (Oxford E)


Marshall, Jim (Leicester S)
Smith, C. (Isl'ton &amp; F'bury)


Martlew, Eric
Smith, Rt Hon J. (Monk'ds E)


Maxton, John
Soley, Clive


Meacher, Michael
Spearing, Nigel


Meale, Alan
Steel, Rt Hon David


Michie, Bill (Sheffield Heeley)
Steinberg, Gerry


Michie, Mrs Ray (Arg'l &amp; Bute)
Stott, Roger


Moonie, Dr Lewis
Strang, Gavin


Morgan, Rhodri
Straw, Jack


Morley, Elliott
Taylor, Mrs Ann (Dewsbury)


Morris, Rt Hon J. (Aberavon)
Taylor, Matthew (Truro)


Mowlam, Marjorie
Thompson, Jack (Wansbeck)


Mullin, Chris
Turner, Dennis


Murphy, Paul
Vaz, Keith


Nellist, Dave
Wall, Pat


O'Brien, William
Wallace, James


Orme, Rt Hon Stanley
Wardell, Gareth (Gower)


Parry, Robert
Wareing, Robert N.


Patchett, Terry
Welsh, Andrew (Angus E)


Pike, Peter L.
Welsh, Michael (Doncaster N)


Powell, Ray (Ogmore)
Wigley, Dafydd


Prescott, John
Williams, Rt Hon Alan


Quin, Ms Joyce
Williams, Alan W.(Carm'then)


Radice, Giles
Wilson, Brian


Randall, Stuart
Winnick, David


Redmond, Martin
Worthington, Tony


Rees, Rt Hon Merlyn
Wray, Jimmy


Reid, Dr John
Young, David (Bolton SE)


Richardson, Jo



Roberts, Allan (Bootle)
Tellers for the Ayes:


Robertson, George
Mrs. Llin Golding and Mr. Martyn Jones.


Robinson, Geoffrey



Rogers, Allan





NOES


Adley, Robert
Burns, Simon


Aitken, Jonathan
Burt, Alistair


Alison, Rt Hon Michael
Butcher, John


Allason, Rupert
Carlisle, John, (Luton N)


Amess, David
Carrington, Matthew


Amos, Alan
Carttiss, Michael


Arnold, Jacques (Gravesham)
Cash, William


Aspinwall, Jack
Chapman, Sydney


Atkins, Robert
Chope, Christopher


Atkinson, David
Churchill, Mr


Baker, Nicholas (Dorset N)
Clark, Dr Michael (Rochford)


Baldry, Tony
Clark, Sir W. (Croydon S)


Banks, Robert (Harrogate)
Clarke, Rt Hon K. (Rushcliffe)


Batiste, Spencer
Conway, Derek


Beaumont-Dark, Anthony
Coombs, Anthony (Wyre F'rest)


Bellingham, Henry
Coombs, Simon (Swindon)


Bendall, Vivian
Cormack, Patrick


Bennett, Nicholas (Pembroke)
Couchman, James


Benyon, W.
Cran, James


Bevan, David Gilroy
Currie, Mrs Edwina


Blackburn, Dr John G.
Curry, David


Blaker, Rt Hon Sir Peter
Davis, David (Boothferry)


Boscawen, Hon Robert
Day, Stephen


Boswell, Tim
Devlin, Tim


Bottomley, Peter
Dicks, Terry


Bottomley, Mrs Virginia
Dorrell, Stephen


Bowden, A (Brighton K'pto'n)
Douglas-Hamilton, Lord James


Bowden, Gerald (Dulwich)
Dover, Den


Boyson, Rt Hon Dr Sir Rhodes
Dunn, Bob


Braine, Rt Hon Sir Bernard
Durant, Tony


Brandon-Bravo, Martin
Fairbairn, Sir Nicholas


Brazier, Julian
Fallon, Michael


Bright, Graham
Favell, Tony


Brooke, Rt Hon Peter
Fenner, Dame Peggy


Brown, Michael (Brigg &amp; Cl't's)
Field, Barry (Isle of Wight)


Browne, John (Winchester)
Finsberg, Sir Geoffrey


Bruce, Ian (Dorset South)
Fishburn, John Dudley






Fookes, Dame Janet
Meyer, Sir Anthony


Forman, Nigel
Miller, Sir Hal


Forsyth, Michael (Stirling)
Mills, Iain


Forth, Eric
Miscampbell, Norman


Franks, Cecil
Mitchell, Andrew (Gedling)


French, Douglas
Mitchell, Sir David


Gale, Roger
Moate, Roger


Garel-Jones, Tristan
Montgomery, Sir Fergus


Gill, Christopher
Morris, M (N'hampton S)


Goodlad, Alastair
Morrison, Sir Charles


Greenway, Harry (Ealing N)
Moss, Malcolm


Grist, Ian
Moynihan, Hon Colin


Hamilton, Neil (Tatton)
Mudd, David


Hampson, Dr Keith
Neale, Gerrard


Hannam,John
Nelson, Anthony


Hargreaves, A.(B'ham H'll Gr')
Neubert, Michael


Hargreaves, Ken (Hyndburn)
Newton, Rt Hon Tony


Harris, David
Nicholls, Patrick


Haselhurst, Alan
Nicholson, Emma (Devon West)


Hayes, Jerry
Norris, Steve


Hayward, Robert
Onslow, Rt Hon Cranley


Heseltine, Rt Hon Michael
Oppenheim, Phillip


Hicks, Mrs Maureen (Wolv' NE)
Page, Richard


Higgins, Rt Hon Terence L.
Paice, James


Hill, James
Parkinson, Rt Hon Cecil


Hind, Kenneth
Patnick, Irvine


Hogg, Hon Douglas (Gr'th'm)
Patten, Chris (Bath)


Hordern, Sir Peter
Patten, John (Oxford W)


Howard, Michael
Pattie, Rt Hon Sir Geoffrey


Howarth, Alan (Strat'd-on-A)
Pawsey, James


Howarth, G, (Cannock &amp; B'wd)
Peacock, Mrs Elizabeth


Howell, Rt Hon David (G'dlord)
Porter, Barry (Wirral S)


Howell, Ralph (North Norfolk)
Porter, David (Waveney)


Hughes, Robert G. (Harrow W)
Portillo, Michael


Hunt, David (Wirral W)
Powell, William (Corby)


Hunt, John (Ravensbourne)
Price, Sir David


Irvine, Michael
Raison, Rt Hon Timothy


Jack, Michael
Rathbone, Tim


Jackson, Robert
Redwood, John


Janman, Tim
Renton, Tim


Johnson Smith, Sir Geoffrey
Rhodes James, Robert


Jones, Robert B (Herts W)
Riddick, Graham


Jopling, Rt Hon Michael
Ridsdale, Sir Julian


Kellett-Bowman, Dame Elaine
Rifkind, Rt Hon Malcolm


Key, Robert
Roberts, Wyn (Conwy)


Kirkhope, Timothy
Rost, Peter


Knapman, Roger
Rowe, Andrew


Knight, Greg (Derby North)
Rumbold, Mrs Angela


Knight, Dame Jill (Edgbaston)
Ryder, Richard


Knowles, Michael
Sackville, Hon Tom


Lamont, Rt Hon Norman
Sainsbury, Hon Tim


Lang, Ian
Sayeed, Jonathan


Latham, Michael
Shaw, David (Dover)


Lawrence, Ivan
Shaw, Sir Giles (Pudsey)


Lawson, Rt Hon Nigel
Shaw, Sir Michael (Scarb')


Lee, John (Pendle)
Shelton, Sir William


Lennox-Boyd, Hon Mark
Shephard, Mrs G.(Norfolk SW)


Lester, Jim (Broxtowe)
Shepherd, Colin (Hereford)


Lightbown, David
Skeet, Sir Trevor


Lilley, Peter
Smith, Sir Dudley (Warwick)


Lloyd, Sir Ian (Havant)
Soames, Hon Nicholas


Lloyd, Peter (Fareham)
Speed, Keith


Lord, Michael
Speller, Tony


Lyell, Sir Nicholas
Spicer, Sir Jim (Dorset W)


Macfarlane, Sir Neil
Spicer, Michael (S Worcs)


MacKay, Andrew (E Berkshire)
Squire, Robin


Maclean, David
Stanbrook, Ivor


McLoughlin, Patrick
Stanley, Rt Hon Sir John


McNair-Wilson, Sir Michael
Stern, Michael


Madel, David
Stevens, Lewis


Major, Rt Hon John
Stewart, Allan (Eastwood)


Malins, Humfrey
Stewart, Andy (Sherwood)


Mans, Keith
Stradling Thomas, Sir John


Maples, John
Sumberg, David


Marlow, Tony
Summerson, Hugo


Marshall, John (Hendon S)
Taylor, Ian (Esher)


Martin, David (Portsmouth S)
Taylor, John M (Solihull)


Mates, Michael
Temple-Morris, Peter


Maxwell-Hyslop, Robin
Thompson, D. (Calder Valley)


Mellor, David
Thompson, Patrick (Norwich N)





Thornton, Malcolm
Wheeler, John


Thurnham, Peter
Whitney, Ray


Townsend, Cyril D. (B'heath)
Widdecombe, Ann


Tracey, Richard
Wiggin, Jerry


Tredinnick, David
Wilkinson, John


Trippier, David
Wilshire, David


Trotter, Neville
Winterton, Mrs Ann


Twinn, Dr Ian
Winterton, Nicholas


Vaughan, Sir Gerard
Wolfson, Mark


Waddington, Rt Hon David
Wood, Timothy


Wakeham, Rt Hon John
Woodcock, Mike


Walden, George
Yeo, Tim


Waller, Gary
Young, Sir George (Acton)


Walters, Sir Dennis
Younger, Rt Hon George


Ward, John



Warren, Kenneth
Tellers for the Noes:


Watts, John
Mr. Kenneth Carlisle and Mr. David Heathcoat-Amory.


Wells, Bowen

New Clause 3

BRITISH NATIONAL NUCLEAR CORPORATION

`A Crown Company, the British National Nuclear Corporation, shall be formed in which the power stations of the United Kingdom will vest on a date to be appointed by the Secretary of State.'.—-[Sir Trevor Skeet.]

Brought up, and read the First time.

Sir Trevor Skeet: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this, it will be convenient to consider the following: New clause 10—The British Nuclear Company—
'(1) The Secretary of State shall direct the generating hoard to place all its property, rights and liabilities relating to nuclear power in a company designated as the British Nuclear Company.
(2) The British Nuclear Company and all its property, rights and liabilities shall remain wholly owned by the Crown.'.
New clause 16—Nuclear levy—
`(1) It shall be the duty of the Director to publish annually and distribute to each of the Consumer Committees, a report showing the difference in that year between the price of electricity generated from fossil and non-fossil fuel.
(2) The Consumer Committees shall have a duty to publish the findings of the Director's report in a manner and form that may be easily understood by electricity consumers.'.
Amendment No. 148, in clause 30, page 24, line 13, leave out subsection (1) and insert—
`(1) The public electricity suppliers shall take steps to ensure that the mix of fuel sources and generation technologies available to them is adequate to ensure the long term security of supply to their customers.
(2) The Director and the Secretary of State shall have powers to require, from time to time, that the pubic electricity suppliers demonstrate to them that their policies in fulfilment of subsection (1) above are adequately contributing to the long term security of supply.'.
Amendment No. 147, in clause 30, page 24, line 14. after 'suppliers', insert
`and appropriate consumers' bodies including the consumer committees and independent consumer organisations.'
Government amendments Nos. 31 to 34.
Amendment No. 160, in clause 61, page 45, line 8, at beginning insert
`save for the nuclear power stations for which the Secretary of State shall make proper and reasonable provision for retention in public ownership.'.

8 pm

Sir Trevor Skeet: I make it clear that all the power stations dealt with in the new clause are nuclear. Being well disposed to the nuclear industry, I am disturbed that steps


are now being taken to unsettle the industry. My experience has been that, for a good many years, particularly in respect of the nuclear waste repository which was scheduled for an area near my constituency, the public have not been ready for a transfer of nuclear assets to the private sector. The public have not had sufficient time or are reluctant to accept the risks inherent in nuclear power, particularly if it is outside the public sector. A Crown company could provide a high-quality assurance to a nervous public who still look to the state for the protection of the environment. I am certain that, in time, that attitude will change and that the nuclear sector will be fully privatised.
It is rather odd that the Opposition and myself will probably vote in the same Lobby tonight, but for entirely different reasons. I am pro-nuclear and Opposition Members are anti-nuclear and pro-coal. It is the irony of history that men of different persuasion must be honest and put forward the arguments. I propose to advance to the Secretary of State the arguments about why a serious mistake is being made in this Bill.
I pay tribute to the Secretary of State for being here tonight. After all, he has many obligations. Important personalities are in the United Kingdom at the moment, and he could be enjoying an important dinner elsewhere.
My first argument is that much of the industry will remain with the state following the passage of the Bill. The production of nuclear electricity and the fuel cycle that is dependent upon it, including the reprocessing and recycling of plutonium and uranium and the disposal of nuclear waste, should properly be retained in a single integrated company. I agree that that is not the CBI's view. At the moment, the whole industry is in the hands of the state and, subject to the passing of the Bill, the United Kingdom Atomic Energy Authority and British Nuclear Fuels plc will remain so. My simple argument is that we should keep all relevant parts of the industry together. It is logical and it makes commercial sense to do so.
Secondly, many of the obligations to the nuclear industry—for example, those in schedule 12 and civil third liability—remain with the state. The obligations arising under clause 90 and schedule 12, comprising subsidies from the revenue for nuclear storage, reprocessing, waste disposal and decommissioning, should be monitored and scrutinised within the state system until the regulatory authority establishes its competence. It is an entirely new body, and we have no idea of how it will behave or perform. Further, third party civil liability for serious accidents remains the responsibility of the Government. Due to its extent, that liability is virtually unassignable to the private sector. The extent of liability remains covered by the Paris and Brussels supplementary conventions, which are multinational agreements.
The House should recognise that the nuclear option is also expensive for a private company. For example, I refer to construction overruns. The 450 MW Dungeness B took about 18 years to complete and had a load factor of barely I per cent., compared with the average of Magnox stations of 79·7 per cent. Hartlepool took 19 years to complete, and Heysham I took 17 years to complete. It is possible that construction overruns for contemporary stations will be reduced if not eliminated. I am glad to say that the work of some of the more recent AGRs has been praiseworthy.
Planning inquiries are diabolically expensive—the Sizewell inquiry cost £20 million—but we can reduce it to £10 million apiece if the planning process can be simplified or rationalised. I stress that there is an increasing burden of BNFL reprocessing charges. They are escalating fast, well beyond the provisions made in schedule 12.
Another point which the House should bear in mind is that on-going research and development is an essential ingredient of modern technology, and limited expenditure or economising tend to be counter-productive.
Energy remains a long-term strategy. The risks of a change in technology are enormous. It is unlikely that the market will provide the necessary investment in the formative and unprofitable stages. That is at least the lesson to be derived from the development of nuclear power in France. With the eventual rundown of fossilised fuels, fission or fusion will probably become inevitable, and Her Majesty's Government should now be in a position to direct it, as a long-term strategy, undisturbed by short-term considerations.
Technology for the production of electricity may change dramatically in coming years, with extensive penalties for obsolescence, particularly in conventional thermal nuclear power. The fusion route, via the Torus model at Culham in Oxfordshire, could be abandoned in favour of the simpler Fleischmann-Pons process, using palladium electrodes at normal temperatures. It is certainly premature to make any judgment of that.
I emphasise to the Secretary of State that a more sympathetic approach towards the potential of the fast reactor for recycling reprocessed products and depleted uranium could substantially advance the energy yield of a given quantity of uranium. The THORP plant of BNFL makes sense only if it produces uranium and plutonium for recycling as fuels in fast reactors. It is regrettable that much of the research on that has been deferred or handed over to other nations to continue. Further research into magnetohydrodynamics could be valuable as a technology for converting thermal energy directly into electricity, thus avoiding the use of turbines.
The state cannot afford to be out of the race for the development of cheap fuels and, as we are in a technological sector—that is the nuclear industry—I maintain that it should be in state hands.
The nuclear element could seriously embarrass the flotation. The flotation of National Power could be jeopardised by the nuclear element unless funds and guarantees are lavished on the company to eliminate risk. Those, of course, could be repudiated by a Labour Government making the company's position intolerable. For example, should the regulatory system be altered—as happened in the United States in the late 1970s—and the utility is obliged to absorb costs that would normally flow through to the consumer, all orders for nuclear power stations could cease to be economic. We recognise that at some time there will be a change of Government. Heaven forbid that that occurs on the next occasion or the occasion after that, but we live in a democracy.
I suggest to the Minister that the retention of the nuclear industry in a company with a franchise to operate granted to National Power could enable a package of nuclear assets to be assembled—within, say, a decade of flotation, when many of the major problems would have been overcome—and then a subsequent disposal arranged. In other words, it would be possible to segregate out of the


present Bill the nuclear industry or the nuclear power complex and defer privatisation to a later date. I am not against its eventual privatisation.
I would further draw to the Secretary of State's attention to the fact that the obligation to build an additional four PWRs of more than 1,000 MW each could embarrass National Power subsequently. Although National Power is being mandated to build four additional PWR power stations of 1,175 MW capacity each, the trend is for the construction of smaller conventional plant and smaller nuclear power stations of 300 MW. The use of the safe integral reactor devised by the UKAEA, Rolls-Royce, Stone and Webster and Combustion Engineering is probably much the best illustration.
It is an interesting speculation whether the £6 billion programme upon which the Government now insist by building Sizewell B and C, Hinkley Point in Somerset and Wylfa in Anglesey could he abandoned if later National Power were to challenge the programme on economic grounds.
There is also a serious risk to the nuclear industry. New technology apart, Britain cannot afford a gradual rundown of the nuclear industry in the United Kingdom due to inaction, economic erosion or short-term energy market considerations. The price of fossil fuels will inevitably rise reversing the competition cycle. I say that because the coal lobby is having a great success at present because coal prices are low compared to what they were 10 or 15 years ago. That situation is likely to alter dramatically. In that case, all the tribute would go back to the nuclear side. There are also certain matters concerning carbon dioxide and sulphur dioxide that could cause nuclear power stations to he favoured.
8.15 pm
I will give an illustration of a lesson to be learnt from Sweden that appeared in the Financial Times on Thursday 22 February of this year. It said:
Sweden faces the prospect of a doubling in the cost of its energy production as a result of the planned phasing-out of its nuclear power programme from 1995".
That is according to the country's state power authority's own estimates. That is rather significant. One cannot afford to ignore the possibility of that sort of thing happening.
The obligation for the generator to supply under earlier Acts is replaced by a series of contractual arrangements administered by the Director General of Electricity Supply, who in turn will monitor clause 30—that is the quota of non-fossil fuel electricity—and clause 31 on fossil fuel levy. The retention of a nuclear interest in a Crown company could facilitate and simplify those arrangements and more easily regulate the size of the nuclear industry.
I suggest to the Secretary of State that he bears this in mind. I understand that competition is the essence of the Bill under clause 3(1)(c) and that a broader basis of competition is now required. That could be effected with the emergence of at least three competing companies—National Power, PowerGen and British Nuclear. That development would not have to await the fruits of a decade of growth within the private sector.
Nuclear power could furnish the surplus capacity required to operate the privatised system. Both the Secretary of State and the director general are obliged under clause 3(1)(a) to keep the lights burning, which in turn implies the provision of significant reserve capacity to deal with shortfalls in electricity supply. Privatisation will

require a much broader margin of capacity to operate the system than in a closely integrated structure. In the United States of America the figure is 33 per cent., in West Germany 50 per cent., and in Japan 49 per cent., as compared with about 20 per cent. in the United Kingdom. A Crown company would enable the Secretary of State to give a specific direction well in advance of likely shortages enabling the company and/or the nuclear industry to act as a "swing producer" for the system. The trouble with the contractual arrangements is that, although they may be subsequently litigated in the courts, they cannot guarantee immediate replacement or response, and a serious interruption in supply could occur. The citizens of New York have had some experience of that in recent years when their lights were extinguished.
It will be fairly obvious that to give a specific direction to any operator will be difficult under the Bill. Clauses 32 and 89 will take time to implement.

Mr. Ashton: It is clause 88, actually.

Sir Trevor Skeet: It is not clause 88, but clause 89. I shall correct the hon. Gentleman, who did not consider the Bill in Committee and therefore would not be expected to know very much about it.
Both clauses 32 and 89 will take time to administer and there may be procedural problems.
I do not want to take up too much of the House's time, but I must say that the idea of segregating the nuclear industry, temporarily at least, and keeping it in the state sector may appear to be an extraordinary idea to this side of the House, but there is a reason behind it.

Mr. Salmond: The hon. Gentleman should not bring his remarks to a close too quickly because the Opposition are an attentive audience. I hope that the hon. Gentleman will explain the relevance of his amendment to the Scottish nuclear industry, because he has spoken about the assets that will go the National Power. The hon. Gentleman correctly surmised at the start of his remarks that I am anopponent of the nuclear industry, but I recognise that technically the SSEB has a better track record than the CEGB. It is important for the hon. Gentleman to address his remarks and the relevance of his amendment to the Scottish nuclear assets.

Sir Trevor Skeet: I am obliged for that intervention, but the hon. Gentleman can make his own speech and I will make mine. The system prevailing in Scotland is rather different. How one approaches this matter rests on a question of understanding and judgment.
The CBI is thinking along exactly the same lines as myself as it has suggested that nuclear power stations should remain in state hands. The CBI and Opposition Members may have special motives for saying that—we all have different motives—but we are all searching for the truth. Some Labour Members cannot see the truth, but we are trying to prevent the Government from going straight ahead for the rocks and making problems for themselves. The Back-Bench Member can stand well back from the mountain and appreciate its height. Perhaps the Secretary of State, who is standing under the mountain, is in its shadow and cannot appreciate the height of the edifice. Therefore, it is up to us to point out some of the difficulties involved.
Because nuclear power was included in the Bill, probably against the advice of some of my right hon.


Friend's advisers, clauses 30 and 31 had to be introduced. They are hardly in line with market conditions, but one must attempt to reconcile the irreconcilable. Perhaps the Secretary of State has done that. Perhaps he has been able to box the compass in every way and achieve his purpose.
The success of Governments lies in the support that they command at a given time. Provided that they get their legislation through, it is years before the mistakes are noted. If the Conservative party is in power in the future, it will say that an error was made now which certain Back-Bench Members tried to avoid. On the other hand, if the Labour party is in power, it will move from crisis to crisis. It will be faced with so many crises to surmount, that it will be unable to establish the conditions that preceded those crises.

Mr. Ian Bruce: Does my hon. Friend accept that the CEGB—or Big G as it will be known—will ring-fence the nuclear industry, which will use the support of the main board and its experience? Therefore, to a certain extent, we shall have a separate nuclear industry. I have discussed this with the deputy energy Minister of the Soviet Union who is currently visiting this country. He told me that the people in the Soviet Union are extremely unhappy that the manufacture of nuclear energy and its regulation are all one and the same rather than those functions being separate. It is far better for the Government to regulate and for someone else to manufacture the power.

Sir Trevor Skeet: Our system is such that if one gets rid of a nationalised industry—I am glad about that because I support privatisation—one puts in its place regulations galore. There are so many regulations that an industry can hardly move.
Obviously things will settle down in future, but one must decide whether to have a plethora of agreements, negotiated between companies, or a national system with a small focal point. I prefer the agreement system, which I have witnessed operating abroad. We must be careful of some of the arguments advanced by my hon. Friend the Member for Dorset, South (Mr. Bruce). Simply because the CEGB will ring-fence the nuclear industry does not mean that the industry will rid itself of liabilities. Such liabilities will be passed down, virtually into perpetuity.
When the nuclear industry experiences some of the additional costs passed on from British Nuclear Fuels from reprocessing and when, in the next 100 years, it encounters problems as a result of decommissioning—such problems are not apparent yet—it will be a good thing for it to be ring-fenced. Ultimately, however, the nuclear industry will remain responsible for the liabilities that may have been created. At a later stage those controlling the industry may have to go to the Government to say that the financial assistance laid down in schedule 12 is not great enough and that it must be increased by a separate Bill. Almost every year we have seen that happen with the coal industry as its borrowing power has increased. Exactly the same may happen with the nuclear industry, and we may end up giving it a vast subsidy to prevent it from going under. I am not suggesting that that will happen because the management is good and it will do its best.
As we pass through this period of great uncertainty, I would be much happier if we left the nuclear industry in the hands of the state. When we begin to understand and solve some of the problems, we will be able to go ahead and privatise and, on that occasion, the public will be behind us.

Mr. Tony Blair: I congratulate the hon. Member for Bedfordshire, North (Sir T. Skeet) on moving his new clause. When he described the purpose of his clause as protecting the long-term future of energy policy he unerringly put his finger not only on the weakness of this part of the proposal, but on the entire privatisation proposal.
Our amendment No. 160 is similar to new clause 3 as it seeks to take the nuclear industry out of the privatisation process. New clause 16 would oblige the director to publish the details of the difference between fossil and non-fossil fuels. Our other amendments relate to diversity of supply.
Surely when we debate the privatisation of the nuclear industry we debate the most remarkable and inconsistent element of the Bill. The nuclear industry will be privatised, but be subject to no competition. It will be sent to market without market forces. The consumer will be under an obligation to buy a fixed amount of electricity from nuclear sources and, for the privilege of being shackled in that way, pay an additional special tax on his bill. This is not so much privatisation as a rather crude form of economic gerrymandering. The privatisation of the nuclear industry is the achilles heel of the Bill because only a Government whose mind was so gripped by doctrine that they had completely banished common sense could contemplate as hare-brained a scheme as the one that they are entering into now.

Mr. Mans: rose—

Mr. Blair: I shall give way in a moment.
The Government's insistence on the privatisation of nuclear power has dictated the terms of the privatisation throughout. It has been the driving factor behind the privatisation proposals. The proposed structure of the industry means that we will have Big G and Little G—70 per cent. of power stations in one company. The Secretary of State admitted to the Select Committee that that proposed structure resulted from the proposal to privatise nuclear power.
The Bill contains a special nuclear quota designed to protect the nuclear industry from competitive pressures because it cannot cope with the market as it is. There will be a special levy or tax on consumers to pay for the new generation of nuclear power stations that private investors will not undertake. When it comes to the decommissioning of existing nuclear power stations the taxpayer will be asked to underwrite the risk of existing nuclear power stations even though the profit from the industry has passed into the private sector. In short we have all the disadvantages of the private sector without even the one benefit it can offer from market forces.
As a result of our debate on new clause 3 and associated new clauses and amendments, we appreciate the dilemma in which the Secretary of State has got himself—it is a fairly incompetent position in which he finds himself. As he attempts to tell investors that the nuclear industry is an industry that can be sold, he offends consumers, but, as he attempts to placate consumers, angry that the industry is


being sold with them guaranteeing the risk, he of course offends investors. For that reason there is a contradiction written into the Bill between the idea of privatisation and the reality of the special ring fence to be built around nuclear power.
We know—not from a leak that emanated involuntarily from the CEGB but from one that appeared in the Financial Times last November that seems to come directly from the CEGB rather than indirectly as did some of later leaks—that Mr. Baker now believes that the new PWR programme cannot be justified unless the costs are underwritten by the consumer. Similar statements were made by Mr. Miller in relation to the Scottish nuclear industry. Since the Government have introduced a nuclear quota, stipulating that a certain amount of power should be bought from nuclear sources, and since only National Power—at least in England and Wales—can build new nuclear stations—the Government have left themselves in a position where National Power can demand that the costs should be underwritten by the consumer. In the provisions that they have introduced, the Government have effectively acceded to that request.
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On report, we are now hearing about the idea of a nuclear tax to pay for the additional costs of nuclear power—in particular, for the new generation of nuclear power stations. My hon. Friends will remember that that tax was at first denied by the Secretary of State. Then we were told that it had existed all along. Finally, in Committee, we received an admission from the Minister that, at present, it amounts to about £500 million a year, which is about 10 per cent. extra on consumers' bills. Even if all went well, it would be down to only 3·5 per cent. or 4 per cent. on consumers' bills by the end of the century.
The Secretary of State must answer the following question. Once this levy has been introduced, once the new generation of PWRs starts to be built by the privatised industry, what will happen if, contrary to the hopes of Ministers, the costs of nuclear power are greater even than the 10 per cent. extra that they now place on consumers' bills? Is there any limit on the levy or tax that will be paid?
The answer is, of course, that there is no limit at all. As a result of the structure introduced by the Secretary of State, we will be obliged to pay this nuclear tax, or levy, irrespective of what it adds to consumers' bills. Although at one stage in the proceedings, he attempted to suggest that the position would be reviewed by the turn of the century and perhaps then the levy could be taken off, it is difficult to see that happening when the levy exists in order to build a new generation of power stations that will exist well into the next century. The Secretary of State has locked us into a system whereby we have effectively given an open-ended commitment to fund a new generation of nuclear power stations without any ability to subject that commitment to the consumers' considerations.

Mr. Mans: Does the hon. Gentleman agree that, as we discussed in Committee, the so-called, possible nuclear levy exists largely to cope with ongoing costs of existing nuclear reactors which will be there regardless of whether the nuclear industry is in the public or private sector? If he is suggesting that existing nuclear power stations should be shut down, the cost to the consumer would be greater rather than less.

Mr. Blair: We shall hear from the Secretary of State whether the nuclear levy is there to pay for existing nuclear power stations. I have a different recollection of our Committee proceedings. The question was put time and again to Ministers about whether the levy covered new nuclear power stations that he wants the industry to build. The Secretary of State will tell us—and no doubt the hon. Member for Wyre (Mr. Mans) will listen carefully—if it does not cover existing stations. I believe that the tax exists to fund the new nuclear PWRs.
We have learnt from the Hinkley inquiry that once privatisation takes effect, the key element on cost for this new generation of nuclear stations will be the rate of return on capital required by the private sector. The London Business School puts that figure at about 11 per cent., which is wildly uncompetitive with conventional fired stations. The evidence given to the Hinkley inquiry, which was not particularly contradicted even by the electricity board, was that once the generation of four stations which the Government want are up and running, that would add anything from £400 million to £800 million to people's bills.
Is it not fascinating to reflect on the distinction between the Government's case as presented at Sizewell and that presented at Hinkley. The world has finally been stood on its head at Hinkley. Rather than the building of new nuclear power stations being the justification of the nuclear quota, the Central Electricity Generating Board's evidence at Hinkley shows that the nuclear quota is now the justification for building the power station. The prime motive behind the building of Hinkley power station is said to be because they have introduced a quota system.
The question which the Government must answer—I know that my hon. Friend the Member for Midlothian (Mr. Eadie) has raised it—is why the nuclear industry should be singled out for special legislative protection. Why does that industry stand alone to ensure that the Government's beliefs are realised? In addition, the proceeds of sale will be reduced as a result of the inclusion of the nuclear industry—that is probably where the Secretary of State and I share common ground. The CBI says that many of the City analysts believe that the proceeds of sale will not be substantially—if at all—increased by the inclusion of the nuclear industry. All these complex and complicated structures are the result of the Government's insistence on privatisation.
The Government accept that all these difficulties exist but they say that that is the only way to privatise the industry. They have not yet taken on board in this debate the fundamental point that, if the industry cannot be marketed without guaranteeing the risk of investors—which makes a nonsense of the idea of putting it into the market—the answer is not to market it and not to privatise it in any shape or form. That is the logical conclusion of the Secretary of State's proposal, from which the Government run away.
New clause 16 is reasonable. It says that it will be for the director to publish the difference between non-fossil and fossil fuels. That is entirely right for this, if for no other reason. We are told that nuclear power is uneconomic. The Hinkley inquiry is fought on a basis that has nothing to do with the economic case for that nuclear power station. Many of my hon. Friends will remember that for years we were told that the justification for nuclear power was that it was economic, and that nuclear power stations would provide us with cheap electricity. Given that record within


the industry, surely it is reasonable—as we suggest in new clause 16—that, if anyone should scrutinise the difference between non-fossil and fossil fuels it should be the director rather than the industry.
Will the Secretary of State confirm—I have heard that this is so—that the area boards wish to set up an organisation in order to implement the levy? The boards are thinking along the lines of a purchasing agency contracted to them or run by them in order to collect the nuclear levy. We would find that utterly unacceptable. If this is to be done at all, it must be done subject to the proper independent judgment of the director, who can look after the interests of consumers. His objective eye should be on the proceedings so that consumers can see exactly what is happening.
The final amendment in the group deals with diversity. It sets itself modest and, in my view, reasonable objectives. It obliges the area boards to consider the issue of diversity, which is the only case that the Government have left for nuclear power, but gives them freedom of choice as to how they meet that obligation. I believe—and I think that many of my hon. Friends would share my belief—that diversity, the argument now advanced by the Government for the new generation of nuclear power, is merely the latest in a long line of excuses for preferring nuclear at the expense of coal. The amendment accepts diversity, but provides a way of achieving it that is neutral as between different sources of fuel and does not put nuclear in a special, privileged position not occupied by coal, oil, gas and other industries.

Mr. David Tredinnick: Has not coal occupied a special, privileged position for the past 30 years because the CEGB has paid more for it than has been really necessary?

Mr. Blair: Exactly the same case could be made about nuclear power. What is interesting about the comments of Mr. Baker in the draft that came—involuntarily—from his office is his letting the cat out of the bag in disclosing that we are already paying a premium for nuclear power. Whatever money may have been put into the coal industry, the hon. Gentleman's argument applies in spades to what has been put into the nuclear industry.
The point that is germane to our present consideration of privatisation is why nuclear is being treated differently from coal. Why is one being made subject to the full rigours of the market and the other not? I believe that the argument about diversity exposes a weakness at the heart of the Government's case. The diversity argument is a very particular type of argument. It is a public policy argument. It is not an argument about market forces or about competition; it is an argument about long-term energy policy. That is what diversity is really about.
On inspection, the only argument for the fossil fuel levy with which the Government are now left is one that refutes the case for privatisation, because it assumes that markets cannot govern energy policy but must yield to the public interest. We may differ on where that public interest lies, but the fact that the Government are now driven to rely on diversity makes us realise that they are driven to accept the impossibility of running an energy policy simply at the behest of the market.
That is the difference between us—not merely on the privatisation of nuclear power or on the question of

diversity, but on the case for privatisation itself. That is why, like it or not, when we support the new clause we are supporting the case for a long-term energy policy. We are supporting the case for market forces not to rule that policy. Ultimately, we are putting forward the case against privatisation, which is not in the interests of consumers, energy policy or the country as a whole.

Mr. Mans: I wish to speak mostly about the nuclear power industry.
It is clear, probably to both sides of the House, that there is a need for a variety of sources of power, not just generation from fossil fuels. I believe that my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) would like an increase, if anything, in the amount of electricity generated by nuclear power, whereas I suspect that Opposition Members would like a reduction and would probably prefer the nuclear industry to wither on the vine as an alternative to fossil fuels in the medium and long term.
My hon. Friend gave a number of reasons for feeling that the nuclear sector should be kept public. He mentioned planning. Planning inquiries into nuclear power stations have indeed taken considerable amounts of time; for all we know, however, if we ever wanted to build a new fossil fuel power station in the future that, too, might result in a long drawn out planning inquiry. One thinks of the preliminary steps taken in relation to Fawley B, a new coal-fired power station which is not yet off the drawing board. Before the plan was scrapped it was already clear that the planning process might take as long as the Sizewell process, judging by the protests from that part of the country.
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At present, capital costs are higher for nuclear than for fossil fuel power stations, but the gap is narrowing due to the need to fit environmental devices to fossil fuel stations to meet the increasing demands of the environmental lobby in this country and elsewhere. While there is no doubt that fossil fuel power stations will continue to have an advantage in terms of capital costs, that advantage is bound to lessen in future.
My hon. Friend also made some relevant points about future investment in nuclear power and research and development. Interestingly, since the privatisation proposals were announced a number of new initiatives have been taken by those in the private sector, such as Rolls-Royce, getting together with American concerns such as Combustion Engineering to produce new schemes for nuclear power stations—perhaps, in some instances, smaller power stations. There is no evidence to suggest that, simply because of privatisation, research and development money will no longer be spent on developing nuclear generation of electricity. BNFL is already looking into feasibility studies on replacing the two Magnox stations at Calder Hall and Chapelcross, perhaps with a modified PWR design. That, too, is a private sector initiative and shows that there is a future for nuclear power in the private sector.
It is also worth mentioning that the running costs of nuclear power stations—as opposed to the capital costs—are certainly of the same order as those of fossil fuel power stations, if not cheaper.

Mr. Beith: The hon. Gentleman confused us all by suddenly referring to a series of power station proposals as


though they had emanated from the private sector rather than from the publicly owned nuclear sector. Will he clarify what he was talking about?

Mr. Mans: I cited Rolls-Royce as one private sector company—a privatised company, indeed—which is very much involved in discussing the production of smaller nuclear power stations, but that is just one example and there is already talk of similar plans in areas outside the CEGB. There is evidence that new initiatives are being taken as a result of the privatisation proposals.
One of the most significant points, mentioned only fleetingly in Committee, is that most of the nuclear power stations are right at the top of the merit order in which power stations are brought on line within the CEGB. That shows, if nothing else, that in purely running cost terms—as distinct from the capital costs of the new process—the generation of power by nuclear means is as cheap as fossil fuel generation. It shows that the nuclear industry has a future as an alternative means of generation in the private as well as the public sector. I therefore see no reason for it to be kept in the public sector.
I submit that in the future, with the increasing environmental restrictions on the generation of electrical power by fossil fuel means, nuclear energy will become a much more viable alternative. For that reason alone development should continue, and should continue in the private sector.

Mr. Malcolm Bruce: This debate is an interesting one, and the hon. Member for Bedfordshire, North (Sir T. Skeet) is to be congratulated on tabling his amendment, which is remarkably similar to one that I tabled at the same time—indicating that there is some common thinking even though, as I freely acknowledge, we approach the problem from totally different directions.[Interruption.] No, I do not disagree totally. That is not the point at all. I think that the hon. Gentleman and I agree on one thing—that the Government have got themselves into the rather ludicrous position of trying to advance the argument of rhetoric—bringing the electricity industry to market and then having to force a rig into the market to distort it. The hon. Member for Bedfordshire, North quite rightly says that this is a piece of nonsense. Why should not the Government operate more honestly, admit that there is a fix, take the nuclear industry out of their rhetoric, and leave the market to operate in the area of the electricity industry where it can more easily do so?
What I find interesting is that for 10 years of Conservative Government successive Secretaries of State have said, in effect, that the Government's policy on energy is not to have a policy. While the industry has been substantially in the public sector, there has been no policy, but now that it is to be privatised the Government have suddenly produced an energy policy—a policy which applies only to nuclear power. Nuclear power, we are told, is required for strategic reasons, but it is not fitted into a grand debate—we are not let into the inside thinking as to exactly what the Government's judgment of the strategy was. Certainly, it does not appear to have been produced by a radical reassessment of all energy options—weighing them up honestly and objectively, and then coming to a conclusion as to exactly where they might fit into a planned, or free market, or hybrid scenario.
We know perfectly well that from the outset the Government have begged every question, determined to

have nuclear power. They knew that once they were committed to privatisation there was no possibility of making nuclear power stand up in the market place on ns own merits, so they introduced this extraordinary Bill, which creates this distortion. Among means of generating electricity, nuclear power is given a unique, distorted and privileged position, which will disadvantage the consumer and other players in the electricity supply industry. That is why, on the question of nuclear power, the hon. Member for Bedfordshire, North came up with a view similar to that of my colleagues and myself.
I think that it was last year, when the privatisation process was put in motion, that the Secretary of State said that the case for nuclear power would have to make itself. However, it could not make itself and it has not made itself, so the Secretary of State has had to introduce a fix in the Bill to take account of the inability of nuclear power to make a case for itself.
A number of factors need to be addressed. First, those of us who have a different view of energy priorities are at least entitled to argue that if we were allowed to determine which particular sector should be given a specific advantage it would not be the nuclear sector. It might be conservation. Certainly conservation ought to be the highest priority of this country, and it is one issue on which the Government can take positive action and make things happen. There could have been a decision to increase the use of natural gas—a much cleaner fuel, of which there is a great deal in the North sea. We could have made a very useful bargain with our Scandinavian neighbours. That would have been of substantial benefit for our medium to long-term energy requirements are concerned. Those options could have been pursued, but the Government did not even allow them to be explored because they had their own priorities.

Mr. Hardy: The hon. Gentleman is making a very interesting point. Does he agree that the Department of Energy was in favour of the Sleipner deal but that, for reasons of international finance, and because of the need to avoid the sort of trade deficits to which we are becoming accustomed, the Treasury opposed it?

Mr. Bruce: I do not accept that. Perhaps the Treasury knew something then that has only come home to roost now. There is no doubt at all that British Gas and the Department of Energy, left to operate freely, would have gone for that system. Indeed, if we had gone in early enough, when BP first mooted it, there could have been substantial benefits to the whole United Kingdom, both economically and in terms of energy.
It is interesting that the Government have decided that in one part of the United Kingdom—Scotland—there will be a separate nuclear company. Admittedly, it will not be an independent company but a subsidiary of the Scottish electricity companies. Nevertheless, the separation of the nuclear industry has been acknowledged as something that is tidy, at least in Scotland. The Government are therefore being somewhat inconsistent in not accepting that England and Wales, or indeed the whole United Kingdom, might benefit from having a single nuclear company.
As the hon. Member for Bedfordshire, North indicated, the nuclear industry is facing a very uncertain future. It was quite interesting that the hon. Member, who is as strong and enthusiastic a supporter of nuclear power as I am an opponent of it, gave us a very substantial list of


uncertainties, escalating costs, drawbacks and disadvantages. That that was from somebody who is in favour of the industry is an indication that serious questions have to be faced which the Government's Bill simply fails to address.
Certainly the cost has escalated. It has already been said today, and was said many times in Committee, that it is extraordinary that up to about two years ago we were told, in spite of the obvious information to the contrary, that nuclear power was the cheapest form of electricity available. Now we have been told that those of us who said that it was dear were right all along—that it was, and has been, the dearest form of electricity available. Throughout that time, those of us who said that it was expensive were told that we were entirely wrong. The consumer, in the Secretary of State's words, has been paying a nuclear levy—the high cost of nuclear power—all that time.
There are increasing problems for the nuclear power industry. First, the cost of reprocessing is rising at an unpredictable and rapid rate. Sellafield has been faced with threats of closure by the nuclear inspectorate because of its inability to meet acceptable safety and operating standards. A private industry which is dependent on reprocessing—that is bad enough, because it is expensive—also has to face the possibility of being totally paralysed if the only reprocessing facility in the country were closed down on safety grounds. The commercial risk of being bound into that system is clear. If I were asked to take that risk—as, indeed, I and all other members of the public are being asked—I should not want anything to do with it.
The problem of decommissioning is also creating uncertainty. That, too, is coming home to roost. The first nuclear power station is moving into its decommissioning phase. When we look back five years from now, I shall be interested to see what the actual cost of that decommissioning to date proved to be. The amount that we are told has been estimated and put aside is £300 million, but those who have been involved in decommissioning experiments in Canada have found that it costs many times that amount. Estimates suggest that the decommissioning of a significant nuclear power station may cost £2 billion—more than the cost, at current prices, of building one.
I accept that these are only ball park estimates by people who may not be totally unbiased, although the Canadians have had experience of decommissioning a nuclear power station. Nevertheless, it may prove to be substantially more expensive than has been budgeted for. The Bill provides for a substantial sum of money to be set aside for decommissioning, but the industry may find that the substantial amount of money to be advanced by the Government is inadequate. The industry faces considerable uncertainties, all of which could add substantially to the cost.
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The biggest problem of all that the industry will have to face is that of waste disposal. The costs and the practicalities of waste disposal cannot be fully quantified because no acceptable system for waste disposal has yet been devised. We must not take short cuts when dealing with waste disposal. It would be much better to store the waste on site in an area where it could be safely monitored than to transfer it to another site for reprocessing. The

problem with nuclear energy is that, the more material one handles, the greater the volume of waste one creates. The industry must confront the problem, and the consumer and taxpayer will also have to face up to it. So must the shareholder. I hope that the Secretary of State acknowledges that.
We are told that the private sector is to be given the opportunity to exercise its commercial judgment in an uncertain market, and the Secretary of State tells us that it will do so far more efficiently than the public sector. However, shareholders are to be told that they will not have to take a risk. The Secretary of State should acknowledge that the shareholders will have to take a risk. The hon. Member for Bedfordshire, North referred to the fact that the regulatory system is likely to be changed. It will almost certainly be changed. It will have to be modified in the light of experience. As and when the political complexion of the Government changes, the regulatory system will undoubtedly be changed. At that point, taxpayers are unlikely to be interested in providing substantial compensation for electricity industry shareholders.
The hon. Member for Bedfordshire, North believes that at some unspecified time flotation may take place, but my proposal is the more honest way to deal with the industry. The Secretary of State's criticism of the over-centralisation of the Central Electricity Generating Board is legitimate, but it has been blurred by the need to create the fossil fuel levy, the non-fossil fuel quota and the nuclear levy. That has distorted the framework of the Bill. It would be in much better shape if at the outset the Government had taken the advice of the hon. Member for Bedfordshire, North, kept nuclear power in the public sector, argued that there were strategic reasons for keeping it there and considered how to privatise the rest of the industry, which I accept is much more open to normal market forces and competition.
Furthermore, I would not privatise the industry until I had proved that a genuinely competitive industry could be created. That would be possible in other parts of the electricity supply industry, but the Government are privatising an industry that has built into it a substantial financial drag—the nuclear power industry. The Government have tried to ring fence it against risk and the foreseeable escalating costs that the industry faces, but they have been unable to take all the uncertainties fully into account. They will therefore find the City and the market less than enthusiastic about privatisation because it has not been thought through and properly worked out. The Government have created a monster which will return to haunt them.

The Secretary of State for Energy (Mr. Cecil Parkinson): I hope that the House will not object if I intervene now to reply to the debate on the new clause and to speak to a number of Government amendments. After I have dealt with the new clause and spoken to the Government amendments, I shall listen to what is said about them and then reply to those comments.
The reasons for Government amendments Nos. 31 to 34 are straightforward. Under the present proposals, the nuclear obligation will be set once by order. We believe that that is too rigid. During the next 12 years, Magnox stations will be going off stream and PWRs will be coming on stream. However, it may not be possible to synchronise it so that, at any given moment, the amount of capacity


that is needed to meet the obligations is available. Therefore, we are amending clause 30 so that we place before the House orders that will recognise the practicalities. That does not represent any change of policy. Our intention is still to fix the obligation at 15 to 20 per cent., but we need flexibility for the reason that I mentioned. Power stations will be going out of commission while new ones are being built.
Another reason, which I believe the House will accept, is that we are aware that although we have set a non-fossil fuel obligation and wish to see renewables come on stream, at the moment there are no sources of renewable energy that could meet a significant part of that obligation. The distributors will be signing up to meet their obligations for non-fossil fuel.
We want to create a new tranche of capacity that is reserved exclusively for renewable sources of energy. We do not expect it to be very large between now and the year 2000. It will be between 200 and 600 MW. It is important to develop renewables. We want to have the right, therefore, to vary the order. There is no point in creating a non-fossil fuel obligation to be met by renewables if they do not exist. We want to have the right to modify the non-fossil fuel obligation to take into account the development of renewables and we shall be reserving a special tranche for that purpose. That is what the four amendments are designed to achieve.
I have listened with great interest to the debate. I mean no offence when I say that the arguments had a certain familiarity about them. We have been debating the subject at regular intervals for about three months. I shall repeat the Government's position. In particular, the hon. Member for Gordon (Mr. Bruce) grossly misrepresented the Government's position. The Government were elected on a commitment to maintain the nuclear power programme and to privatise the electricity supply industry. I have made it clear in every speech that I have made that we recognise that the non-fossil fuel obligation is a distortion of the market, but we believe that it is a worthwhile distortion, for these reasons.
We believe that security of supply is absolutely vital. We believe that diversity is the basis of security, and that has been my argument since the day I took office. I believe passionately that diversity of sources of energy is a vital part of ensuring the security of supply. In case there are hon. Members with short memories, may I say that we have had at least three major incidents in the past two decades which have underlined the value of nuclear—the two oil price explosions and the miners' strike.
Without nuclear during those three major incidents, this country's supplies of electricity would have been put at risk. I have said this before and I will repeat it because, although it annoys Opposition Members it is true: without nuclear during the miners' strike, Mr. Scargill would have won. So we believe that the case for diversity has been made three times and that it would be an irresponsible Government who did not learn from those experiences.

Mr. Blair: What about oil?

Mr. Parkinson: The hon. Member for Sedgefield (Mr. Blair) asks me to talk about oil and that is precisely the point that I am going to make now—the volatility of fossil fuel prices, even since this Bill was introduced. In the past six months the price of oil has moved from $12 a barrel to $20 a barrel, and there is no one who does not believe that

in future oil prices will move gradually, inexorably and inevitably in one direction—upwards. So we need diversity of sources of supply to give us the necessary security.
We were elected on a promise to privatise and a promise to maintain a nuclear programme. We are determined to honour both those promises and also to make sure that those who benefit from diversity contribute to the cost; that is the reason for the non-fossil fuel obligation, which will enable us to meet both our commitments. It will enable us to privatise and it will maintain the nuclear programme.
Let me repeat once again a remark that I have made over and over again but which the hon. Member for Sedgefield simply cannot or will not understand. The non-fossil fuel obligation does not increase or decrease costs; it opens them up for public inspection. Now, for the first time, as a result of our proposals, the public is being told what nuclear costs are and it will have set out for it every year the difference, if there is one, between fossil fuel prices and prices of nuclear. So the Government are not in any way hiding the costs of nuclear. For the first time the public is being told what the costs of nuclear are.

Mr. Blair: The hon. Member for Bedfordshire, North (Sir T. Skeet) asserted that it was no part of the function of the nuclear levy or tax to cover the cost of the new pressurised water reactors. Does the Secretary of State agree with that?

Mr. Parkinson: I will deal with that point in my own good time. The point that I wish to make now is that nuclear costs are being incurred at present and that if, God forbid, we had a Labour Government tomorrow, the nuclear costs would continue to be incurred because we need the capacity that the present nuclear stations give US. So there would be no change with a change of Government, and the costs of nuclear would continue to be what they are—the costs.
What we are arranging to do is to expose those costs. So in 80 to 85 per cent., of the market we will have competition in the supply of electricity and in the 15 to 20 per cent. met by nuclear we will, for the first time, have transparency: people will know what they are paying for.
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What I find particularly puzzling about Opposition Members is that they continue to attack us for exposing the costs of nuclear and to defend a system which conceals them. At present, the cost of nuclear is wrapped up in the bulk supply tariff, and nobody knows precisely what it is.

Sir Trevor Skeet: rose—

Mr. Parkinson: Whatever it is, every electricity user in this country pays it. It is being paid now and the fact that it becomes known and identified will neither increase nor decrease it.
Again, privatisation will not increase the nuclear component. In fact, ironically, for the first time the public is being consulted through Parliament about the level of nuclear provision. Were we not to have come forward with this Bill, it would have been declared CEGB policy to build four PWRS initially, with another five by 2003; so privatisation is not producing more nuclear power; it is exposing the costs of nuclear power and ensuring that the public, through Parliament, is consulted about the level of the nuclear obligation.

Sir Trevor Skeet: rose—

Mr. Parkinson: The hon. Member for Sedgefield gives the impression that somehow or other privatisation has put nuclear in a privileged position. Privatisation has put the first four PWRS in a privileged position, but the rest of the programme will have to be settled on is own merits by Parliament. The system that the hon. Member for Sedgefield and the hon. Member for Gordon defend would have imposed on the country a huge nuclear programme, would have wrapped up the costs in the bulk supply tariff —the plans are already made—and the public would have had to accept them on its own cost-plus basis.

Mr. Blair: rose—

Mr. Parkinson: That cost-plus basis is the basis on which the public has had to pay for nuclear from day one.
So here we have a position in which the Government are prepared to declare their commitment to nuclear, prepared to reveal and justify the costs and prepared for the first time to tell the public what they are. Opposition Members defend a system which imposes these things on the public without consultation.

Sir Trevor Skeet: The Secretary of State makes some very astute observations. May I ask him a simple question on costs? What is the difference in cost to the state with the nuclear industry inside and with the nuclear industry outside the state system?

Mr. Parkinson: I will explain in a moment why I believe that, although there are difficulties with nuclear—and I do not deny them—even with those difficulties the nuclear component is far better in the private sector and that the country will be far better off having it in the private sector.

Mr. Blair: I want to correct the Secretary of State on one point. It is the most extraordinary drivel to say that the electricity generating board would have insisted on the nuclear reactors and that somehow the things are now up for choice. The Government have already made the decision anyway; the inconsistency is having made the decision by giving the ring fence of nuclear power and then putting it in the private sector. The Secretary of State has said that the nuclear tax covers these four PWRs. Supposing that the hopes on cost are wrong and that we find that those PWRs are considerably more expensive than conventional plant. Is it not the case that under his proposals the consumer will pay the difference?

Mr. Parkinson: The consumer always pays the difference, as he does under the present system. The difference is that those costs will be exposed and the cost of the electricity will be exposed, and if the public does not like those costs it will have a choice about whether it will pursue a nuclear policy. I believe that it will. I believe that the arguments for nuclear will become stronger and are becoming stronger day by day.
I mentioned the volatility of fuel prices. We are now seeing a growing world awareness of the dangers of being over-reliant on fossil fuels. We know about the greenhouse effect, the acid rain effect, the generally polluting effect of fossil fuel-produced electricity. I believe that the arguments will move firmly in the direction of more nuclear in the years ahead. But nuclear will not be imposed on an unwilling country as it has been in the past, by

Labour Governments in particular. In future, it will have to justify its existence, after the four PWRs that we are committed to helping the industry to build.
I repeat that it is not privatisation that is ring-fencing the nuclear programme for the first time. The nuclear programme has been imposed on the country by successive Governments and we are maintaining the existing level. We are not increasing that level and we are not reducing it; we are simply maintaining it.
My hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), who wanted to keep the industry in the public sector, and the hon. Member for Sedgefield disagreed on just about everything else; there was not a single word in my hon. Friend's speech that the hon. Gentleman could really support. My hon. Friend suggested that keeping the industry in the public sector would help. I believe that that would be fundamentally wrong, and we have the experience of the past to prove it. The history of the British nuclear programme—a history in which the Labour party played a prominent part—is littered with appallingly wrong and bad decisions.
The AGR programme has been mentioned in the debate. We have heard a list of stations which were 18, 17 or 16 years late. That programme was imposed on the country by a Labour Government. They chose the wrong technology. They imposed it on industry. The programme was carried through in an appallingly incompetent fashion. There was a total lack of financial discipline and management.
Already, simply as a result of the threat of privatisation, we see a change in attitude. The CEGB is starting to drive hard bargains with its suppliers. Now that it is aware that it is no longer in a cost-plus position, the CEGB is talking to BNFL about not getting fixed price contracts and no longer being at the mercy of BNFL's cost-plus mentality. Why is the industry coming to see me to argue the case for help and protection? It is because it recognises for the first time that it will not be in a cost-plus position and that it will not be in the position, in which Labour Governments would leave it, and which it would be in if it were in the public sector, of being able to spend whatever it likes and passing the cost through. There is the beginning of financial discipline in an area where there has been none, and where there would be none if the programme stayed in the public sector.

Mr. Morgan: In the light of the disparaging remarks that the Secretary of State has just made about the AGR programme, if the CEGB and its successor company, National Power, were to propose not to operate the AGR stations that are coming on stream this year—Dungeness B, Heysham 2 and Hartlepool—and merely kept them in reserve so that they qualified under clause 30 as capacity available—if the nuclear levy could be reduced by not operating them but merely having them as reserve capacity —would the Secretary of State agree to that suggestion?

Mr. Parkinson: A very large sum of money has been spent on the AGR programme and we are now at the point of seeing improved performance from those stations. A substantial part of the expenditure has had to be written off, but it is now producing results, albeit 10 to 15 years late. Opposition Members ducked sharply when we pointed out that in one of those leaked documents, which were the only research that they seemed to do in Committee, the industry had announced that it would


have to write off £1,600 million of taxpayers' money because of the bad decisions taken exclusively by Labour Governments on the AGR programme.
We want to get the whole of the industry into the private sector. We want to get away from political influence and political impositions. We want to put the industry in the hands of commercial management. Even though there will be less competition in nuclear than we would wish, we believe that it will still be better managed, better off and more accountable if it is in the private sector.
We have heard some remarks about what the CBI wants. We have been told that the CBI wants a nuclear programme, that it wants it to stay in the public sector and then that it wants it to be floated off to create a competitive third force. My view is simple: what the CBI wants is the benefit of the security that comes from nuclear, but it does not want to make its contribution to the cost. Not only is the non-fossil fuel obligation a useful means of encouraging the development of the next generation of nuclear power stations but it is a way of ensuring that everybody who benefits from that diversity and security makes a contribution.
The hon. Member for Sedgefield asked how the system would work. I explained in Committee that there will be collective purchasing, through a company set up for that purpose, by all the area boards of the production from the nuclear stations. That production will be sold at the fossil fuel price to the area boards. If there is a difference and if the cost is higher than the selling price, that will become the levy, and that levy will be paid by all who use electricity. It will not be possible just to impose it on the domestic customer, which is what some people in industry argue for. The non-fossil fuel obligation will encourage the development of nuclear power stations but it will also ensure that the cost of those stations is fairly borne.
We believe that new clause 16 is unnecessary. It will be the director general who will compute the levy. It will be his job to decide the correct level of the levy and to publish it. It will also be the job of National Power separately to account for its nuclear production. That also for the first time will become transparent and people will know what they are paying for, but the director general will be part of the process of setting the levy; he will oversee it.
Amendment No. 148 proposes an interesting development. For the first time on behalf of the Opposition the hon. Member for Sedgefield recognised tonight the importance of diversity as a source of security, but in classic muddled Labour fashion. Having identified it as something desirable, they then make arrangements for it not to happen. They make a proposal for a vague system that encourages people to think about the possible benefits of diversity. We are not mealy-mouthed. We believe strongly that nuclear is the main source of diversity. As a result we are prepared to commit ourselves to justify our policies.
We noticed in Committee that the hon. Member for Sedgefield becomes remarkably coy if questions are addressed to him. When we ask him if he would close down the nuclear stations we get no answer. We point out to him that Cleveland Bridge is on the edge of his constituency and is very dependent on the nuclear programme; when we ask him if we may tell people there on his behalf that they will be out of a job, he looks coy, rushes off and talks to his journalist friends.
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When we got to questions of coal and Mr. Scargill, the hon. Member for Sedgefield handed over to his hon. Friend the Member for Rother Valley (Mr. Barron) and made arrangements not to be in the Committee Room, so he was not there while the arguments about coal took place. I was there, and I witnessed the hon. Member for Sedgefield achieve the impossible—of being present, but not in the Committee Room, for most of the time. [Interruption.] The hon. Gentleman is happy with his rhetoric and heated speeches, but we never find out in what he believes. We only know that he is opposed to privatisation, although we read in The Times that privatisation will stay and that the structure which we are putting in the private sector will remain for many years, because it will be a long time before there is a Labour Government. In any case, they would only tighten up the regulatory system. In other words, we hear a great deal about what is wrong with our proposals, but Opposition Members have no real plans for changing them. They would only regulate them a little, should they ever get the chance to do so.
We are asked, in connection with amendment No. 147, whether it would be appropriate for consumer committees to be involved in making the order setting the non-fossil fuel obligation. We believe that that is a matter for Government and Parliament—that it is for Government to make their proposals to the House, and we intend to do that. We do not think that local consumer committees would have a great deal to contribute to the setting of the non-fossil fuel obligation. That job is better done here in Parliament.
The House has had from the Opposition, and in particular from Labour Members, a typical piece of Labour escapism. They know full well that, in the nuclear programme we have, the nuclear stations owe much to policy decisions taken by them; they know that they cannot be closed; they know that we need them to ensure the security of the system; and they know the cost and object to the fact that we will expose the cost and argue the case for diversity instead of imposing it on an unwilling country. Nuclear has a great contribution to make. We are prepared to argue the case, to expose the cost and to have a transparent system.
I hope that my hon. Friend the Member for Bedfordshire, North will change his mind about pressing his new clause and that my hon. Friends will join me in exposing Opposition Members as a bunch of bogus no-hopers who have nothing to offer but criticism.

Mr. Ashton: We have just heard a remarkable speech from the Secretary of State. He began by saying that the Bill was designed to take the decisions out of politics and allow costings to be made without regard to political issues, but immediately went on to make a political speech, using the need for nuclear power to slap down the National Union of Mineworkers. Nothing has been said in the debate so far about the part played by gas turbines or about the new EEC regulations concerning the surplus of gas in the North sea and its use for generating electricity. That issue has immense ramifications for my constituency and in particular for West Burton B, the proposed coal-fired power station.
About two years ago the right hon. Gentleman who is now the Secretary of State for Wales, then Secretary of State for Energy, astonished the House one Question Time


by saying that he would approve the building of a new coal-fired power station, West Burton B, close to West Burton A, in my constituency. The CEGB, which we had been lobbying for at least two years, said that it was keen to have that power station because planning permission for it had been agreed and it could be built quickly. It was pointed out that West Burton A already existed, that the roads and railway lines were there, that it would be handy for the river and that it would be close to the rich coalfields of Nottinghamshire. Indeed, the CEGB said in a publicity handout that it
would be planned to be in operation by 1995. It would be a large station with a generating capacity of 1,800 megawatts. Decisions have to be made soon because it takes about five years to build a coal-fired power station.
The then Secretary of State for Energy made his announcement a month before the general election. There were marginal seats in Nottinghamshire, there had just been a coal strike and there was much conflict between the NUM and the Union of Democratic Mineworkers. Today, more than two years later, not a sod has been turned or a brick laid. We continue to have only promises.
That power station was expected to create 2,500 construction jobs during the five years that it would take to build it. In my constituency there is 17 per cent. male unemployment in Worksop. A further 600 jobs were to be created in running the power station and many more running the railways, building a new road and even supplying fish and chips to the canteen. It was said that West Burton B would be given priority by the CEGB. It would have preferred Fawley in Southampton, but there were objections there because of property values. As there were no objections to West Burton B, it was agreed that the plan should go full steam ahead. All the councils agreed to the planning regulations.
Every time I have tabled questions to the Secretary of State for Energy about why he has not given his approval, he has said that there have been delays with the local councils on planning regulations, but the local councils agreed 41 out of 42 planning regulations very rapidly. The remaining one was whether a minor road should be straightened out before or after the power station was built. There has been no delay in deciding planning conditions for the power station, but we are still awaiting a decision.
The power station would keep five pits open. It would burn anything up to 5 million tonnes of coal a year. In Nottinghamshire, where the UDM supported the Conservatives throughout the miners' strike, the Conservative majority for the hon. Member for Sherwood (Mr. Stewart), who is not in his place tonight, went up from 600 to 4,500 and the majority of my hon. Friend the Member for Mansfield (Mr. Meale) fell to 56. UDM members were promised continually that they would be looked after by the Conservative Government, and the promises continued until the last general election, but when it came to delivering those promises nothing happened. Since then there has been nothing but delay.
In desperation, I turned to the CEGB and asked Lord Marshall of Goring, "Do you intend to build the power station? Where do we go from here?" He wrote me a very friendly letter:
Dear Joe…It is no longer our decision whether or not to go ahead with West Burton. There is excess gas in the North Sea and the EEC Regulations have now changed so

that it is permissible to burn gas to make electricity … the options now include building coal stations or to build plant with combined cycles of gas turbines with steam turbines. At the moment I really have no idea what choice the Area Boards will make. In my opinion it is the answer to this question that will determine the future of the West Burton project, and the hesitation you see is not due to our final discussions on planning matters.
The Area Boards must give us a decision about the Fawley coal-fired station within the next few weeks, but it is only fair and realistic for me to tell you that I do not think we will get a decision from them concerning West Burton until a later date.
So the whole project is back in limbo. We were told that if there were a bad winter in 1992, the CEGB would have to have power cuts because it would not have sufficient capacity to meet demand. That was the urgency for West Burton B. Everyone knew that the Government did not want a coal-fired power station and would have preferred a nuclear power station, but they knew that it would take two or three years to get planning permission for another Sizewell or nuclear power station and there was already planning permission for West Burton.
So why is there a delay? I will tell the Secretary of State why I think there is a delay and I hope that he will come clean and tell us the real reason. I think that he does not want to saddle the new buyers of the electricity industry with a £1,000 million debt for the new coal-fired power station. He knows as well as we do that under the old nationalised industry, the CEGB used to run at 80 or 85 per cent. of capacity. It could not afford to run any higher or faster than that because if there had been power cuts because it was too close to capacity there would have been a political uproar and an outcry against the Government's mismanagement of a nationalised industry. But when the industry is sold off the private people can run it at 99 per cent. If there are power cuts and they have not provided enough capacity, they either import more from France to take the place of Fawley power station or say, "Hard lines, there will have to be cuts in consumption or electricity will go off at peak periods." They will be able to get away with that because the industry will be privately owned. New clause 16, which shows the difference in the price of electricity, must therefore be implemented.
Another factor may be that the buyers of the industry want a coal-fired power station but do not want such a power station burning coal at the present price. If they can delay the building of the power station for five or 10 years and in the meantime two new ports are built on the Humber—there is a Bill before the House dealing with that —they will be able to import cheap coal from South Africa, China, South America, Poland or elsewhere. That would make it more profitable. By that time, more pits in Nottinghamshire and south Yorkshire will have closed. That is probably the reason for the delay. The costings will be done again on the basis of cheap imported coal rather than whether, on present costings, coal is cheaper than nuclear power.
The Library research document says that clause 16 is most important. It offers a private supplier an escape if there is a power cut caused by circumstances "not within his control". That means that a heavy snowfall or excessive cold could be circumstances "not within his control" and there could be power cuts which might be disastrous for anybody dealing with a frozen food factory or freezers in houses. Yet in such circumstances the private supplier would be protected.

Mr. Jonathan Sayeed: The hon. Gentleman subscribes to the conspiracy theory as to why something has not happened, but could it not be that the generating authority is looking at combined steam and gas generation as it is likely to be cheap and much cleaner?

Mr. Ashton: That is the latest proposal as a result of EEC regulations. However, as Lord Marshall said, it is no longer his decision. When the Bill is enacted and the industry is privatised, as it will be in a few months, everybody can wash his hands of it and say, "It is nothing to do with me." For two years, the ball has been kicked from the Secretary of State to the CEGB and the local councils have been blamed. If the power station were to be built, five pits would be kept open. That power station should now be 2ft high and due for completion in 1992.
There is a financial consideration and many jobs are involved. We are talking about the future of the pits and of the area, but we cannot get a decision from the Secretary of State. He will not nod his head and say, "Go ahead." He wants to delay until after the Bill is enacted and the new ports are sucking in cheap coal. If he cannot give us an answer at the end of the debate, I hope that he will agree to meet a delegation from my local council and the coalfield community so that we can sit round a table and thrash this out rather than having to debate it in the House.

Mr. Michael Irvine: It was startling enough to hear my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) advocating retaining the nuclear element of the power generating industry in public ownership, but it was even more startling to hear some of the arguments that he put forward in favour of that proposition. I heard him saying, for example, that one of the key arguments in favour of retaining the nuclear element of the electricity generating industry in public ownership was the fact that in constructing nuclear power stations, cost and time overruns were frequently encountered. He mentioned Hartlepool power station, which took 19 years to build, as an example. I can trump that by mentioning Dungeness B, which took 20 years to build. My hon. Friend drew from this conclusion that the nuclear element of the power generating industry should be retained in public ownership.
9.45 pm
I draw the diametrically opposite conclusion—that it is about time such things stopped. No private industry could possibly countenance such cost or time overruns. State corporations can and do tolerate such inefficiency. It is about time that that was put to an end and I am glad that the Bill will do so.
While listening to my right hon. Friend the Secretary of State, I noticed that there were 12 Labour Members sitting opposite him. Of those 12, no fewer than 10 represent coal mining constituencies. I looked across the Chamber and my eyes encountered the steely glare of my old adversary, the hon. Member for Ashfield (Mr. Haynes), a miner himself for many years and an official of the National Union of Mineworkers. I looked along the Bench and saw the hon. Members for Rother Valley (Mr. Barron) and for Sedgefield (Mr. Blair) and behind them the hon. Members for Pontefract and Castleford (Mr. Lofthouse), for Bassetlaw (Mr. Ashton), for Midlothian (Mr. Eadie), for Rhondda (Mr. Rogers), for Wentworth (Mr. Hardy) and for Hemsworth (Mr. Buckley).

Mr. Allan Rogers: Whom do you represent?

Mr. Irvine: I represent 68,000 consumers in Ipswich.
Another hon. Member who was present then, but who is not here now, was the hon. Member for Barnsley, Central (Mr. Insley). He had the distinction of being the chief administration officer of the National Union of Mineworkers form 1984 to 1987. In Committee, I called him the high priest of the mining interest and that was a fair description.
I make no criticism. Those Opposition Members are right to be here to represent their constituencies and to put forward the case for the coal mining industry. But we should remember that they have that particular vested interest at heart and that the case that they put forward, very properly, is the case of that particular vested interest. It is interesting to compare the scale of their turnout with the overall turnout of Labour Members.

Mr. Haynes: I am going to deal with you.

Mr. Irvine: I heard something of a threatening remark pass across the Chamber.

Mr. Speaker: Order. I hope that it was not an unparliamentary threatening remark.

Mr. Irvine: In my judgment, it was near the borderline, but probably not quite over it.
In his speech earlier, the hon. Member for Sedgefield asked why the nuclear industry has been singled out for special treatment. I can give him one very good answer, which is at the heart of the case made by my right hon. Friend the Secretary of State. Having a nuclear-generated element in the power industry means that there is that much greater diversity of supply. The hon. Member for Sedgefield said that the argument about diversity of supply was the only case that the Government had left. He said it in a derisory and mocking manner. Whether or not it is the only case is immaterial because it is a very good case and goes right to the heart of the Bill.
My right hon. Friend the Secretary of State made the point that oil was subject to rapid price swings. He mentioned how, in the six months since the Bill first started on its way through the legislative processes, the price of oil had risen $12 a barrel to nearly $20 a barrel. That is a significant argument against relying too much on oil as a source of generating energy.
Coal has been just as erratic and dangerous a source of supply. During the past 20 years the generation of electricity in this country has been threatened by major strikes three times. The last one in particular was a highly politically motivated strike. The generation of electricity was threatened in 1972, again in 1974 and most crucially in 1984–85.
Therefore, it is entirely right and proper that while giving market forces due rein and producing the efficiency and the benefits that market forces can bring the Government should, in a very undogmatic, pragmatic and common-sense way, treat the nuclear element of the industry as a special case. It is absolutely right that it should be treated as a special case because it will add to the diversity of our electricity supply. Greater diversity of supply ultimately means greater security of supply.

Mr. Eadie: I understand that the hon. Member for Ipswich (Mr. Irvine) made the same speech in Committee.


Probably the only good thing about it was the advertisement that he gave to my hon. Friends' assiduous attendance during the debate.
I find it strange that the debate seems to have developed into an advertisement for nuclear power. I found it a bit rich when the Secretary of State decided to intervene to rubbish existing British nuclear technology and came out in favour of the PWR. We in this country have never had a PWR. As I have said before, we are building an American-British bastard version of a PWR, which has not yet worked. When we are talking about efficient technology and advertising nuclear power, I advise the House to look back at the history of nuclear power in all countries because when there is a new nuclear generator and a new generation—

Mr. Sayeed: rose—

Mr. Eadie: If the hon. Gentleman will allow me, I should like to continue.
When there is a new nuclear generator, there is always trouble to start with. That will be the history of this exercise.

Mr. Mans: rose—

Mr. Eadie: Perhaps the hon. Gentleman will allow me to finish my point. I have only just started my speech.
I thought it a bit rich of the Secretary of State to rubbish British nuclear technology when we are taking the Westinghouse American type. They decided not to build any more, so it is a bit rich to put that defence.
I am trying to say that the debate has become a general advertisement for nuclear power. Just last week I read that the Government are so confident about nuclear power and thermal nuclear power that they propose to spend £20 million advertising it. It reminds me of the old ditty that I heard as a boy. It went something like this.
The codfish lays a million eggs, the hen lays only one, but the codfish doesn't cackle when its little stunt is done.
The artful hen we praise, the codfish we despise, but every thinking man will agree it pays to advertise.
The right hon. Gentleman proposes to spend £20 million advertising a deficient case.

Mr. Sayeed: Will the hon. Gentleman give way?

Mr. Eadie: I want to make my speech, but I will give way. The hon. Gentleman has not been present for the whole debate.

Mr. Sayeed: The hon. Gentleman is quite right. I have not been here during the whole debate. However, if I remember correctly, the hon. Gentleman said that we had never built a PWR. Every nuclear submarine operating from and built by this country has a PWR at the heart of its generating system. They have worked safely for many decades. The hon. Gentleman should not forget that PWRs are effective and safe.

Mr. Eadie: Whatever qualifications the hon. Gentleman may have, he has no qualification in engineering.

Mr. Sayeed: That is quite wrong.

Mr. Eadie: I am astonished. I do not know where the hon. Gentleman got his qualification. He is talking about a little nuclear reactor in a submarine and comparing it

with building a big thermal nuclear power station. It defies analogy. If the hon. Gentleman were to make that suggestion in an institute of engineering, he would be laughed out of the place. I should not have given way to the hon. Gentleman.
My old adversary, the hon. Member for Bedfordshire, North (Sir T. Skeet), introduced this debate. I have great admiration for the hon. Gentleman. He is always diligent. Whether or not we agree with him, he always spends time and energy on his speeches. He has been here during the debate. The fact that he is absent now is no criticism. He has been present since 3.30 this afternoon. Perhaps he is having a cup of tea. In the course of the argument that he was trying to build, he said that he was searching for the truth. It is a search not for the truth but for the blarney stone. The hon. Gentleman used phrases such as, "Let us have temporary public ownership for a few years, at least until the difficulties have been overcome." He is pro-nuclear and anti-coal. I should have thought that someone of his experience who is pro-nuclear would understand the technical problems of nuclear power in the United States of America and in this country. The problems will not go away in three years.
The hon. Gentleman said also that the public are not ready. I cannot understand why the public are not ready. Perhaps they find it unacceptable that they have been asked to pay a high cost for this Bill. The hon. Gentleman considers that the Bill is in a state of crisis. New clause 3 could have a different title. It could probably be called the "Saving of the Privatisation of the Electricity Supply Bill". The hon. Gentleman was not confident that the Bill would succeed unless we had public ownership, as he described it, of the nuclear section.
We have talked about the nuclear tax. My hon. Friend the Member for Sedgefield (Mr. Blair), the shadow Secretary of State for Energy, made his contribution in Committee and has made great play of that tax. I know that to some extent that has worried the Government, because it is getting home to the general public that, despite what the Secretary of State for Energy has said, they are paying a tax for nuclear power. It is what we describe as a blatant preference for nuclear power.
The coal industry has been brought into the debate, but what have been the arguments in favour of nuclear power?

It being Ten o'clock, the debate stood adjourned.

Ordered,
That at this day's sitting, the Electricity Bill may be proceeded with, though opposed, until any hour.—[Mr. Chapman.]

Question again proposed, That the clause be read a Second time.

Mr. Eadie: All the arguments in favour of nuclear power have been torpedoed to some extent in the debate and at the various inquiries held. Two of the main arguments in favour of nuclear power were that it was environmentally more acceptable and that it was cheaper than coal, but we know that that is not true. The chairman of British Coal has said—I do not know where he obtained his figures, and various figures have been quoted in the debate—that there is evidence that in the immediate future the gap would be as high as 40 per cent. between coal and nuclear power. To some extent, therefore, the price argument has also been torpedoed.
It has been argued that environmentally coal is a very dirty pollutant, but that argument has also been destroyed to some extent. On a worldwide basis, coal is responsible


for about 15 per cent. of pollution, but in Britain it is responsible for half of 1 per cent. Hon. Members who talk about dirty coal and its polluting effects should put the matter into perspective. When I led a delegation from the miners' parliamentary group to meet the Secretary of State for Energy, one of the points that we made was that it was time that he stood up and defended coal. He is a custodian of the coal industry. It is rubbish to make out that coal is the main pollutant in this country. The right hon. Gentleman knows that that is not factually true. As the sponsoring Minister, he has a responsibility to defend the coal industry.

Mr. Michael Stern: rose—

Mr. Eadie: I will give way to the hon. Gentleman as he has been here for most of the debate.

Mr. Stern: I have been listening to the hon. Gentleman with some incredulity. Does he agree that of the fossil fuels that are burned, coal is the greatest pollutant? In fact, if we are talking about atmospheric pollution, will he agree that however little—according to his statistics—coal contributes to atmospheric pollution, nuclear power contributes nothing?

Mr. Eadie: I shall come to that aspect. I begin to wonder when the debate will end, because the hon. Gentleman has tempted me. Incidentally, his figures are wrong and he should look at them again. I have looked up the figures. I have already given the main pollutants. Coal contributes 15 per cent. to the carbon dioxide elements of the greenhouse effect, gas contributes 6 per cent. and oil, primarily for transport, contributes 16 per cent., so coal is not the main pollutant. The hon. Gentleman should obtain the figures from the Library. He will then be able to inform the House that coal is not the main pollutant.

Mr. Stern: Will the hon. Gentleman give way?

Mr. Eadie: The hon. Gentleman has had his opportunity and another hon. Member wishes to intervene.

Mr. Ian Bruce: The hon. Gentleman referred to pollution from the coal industry. He will be aware that the amount of nuclear radiation that comes from coal ash is far in excess of anything emitted from a nuclear power station. If the nuclear installations inspectorate visited a coal-fired station it would close it down if the same rules were applied as it applies to the nuclear industry. The hon. Gentleman mentioned 15 per cent. of pollution coming from coal-fired stations, but he did not answer the question put by my hon. Friend the Member for Bristol, North-West (Mr. Stern) about the amount of pollution from nuclear stations.

Mr. Eadie: Again, it was a mistake to give way. The hon. Gentleman must look up the facts if he wishes to pursue such an argument. I hope that when the hon. Gentleman makes his speech he will give the source of his evidence as it is not factually correct.
We cannot draw a comparison between the environmental effects of the coal and the nuclear industry because they are not in the same race. Nuclear power is unforgiving technology, as we know from Three Mile Island, Chernobyl and Windscale. We are told how good thermal nuclear power is and how well the Westinghouse PWR works, but some hon. Members know that in the United

States not one such reactor has been built since 1974. When I was last in the States I was told that no one had any intention of building another such reactor because they were publicly unacceptable. Incidentally, I was also told that no one would build a PWR similar to the ones that we propose to build because they are technologically out of date.
The Secretary of State referred to security of supply. I have made many speeches in this House on that and coal must be considered in that context. Every station should strive to achieve security of supply
.
We know that the oilfields of the North sea are now past their best. In the 1990s, production will decrease by 1 million barrels per day. Today it has already been said that in the 1990s the price of oil will escalate and that OPEC will be in a position to dominate the price of oil. In the 1970s we carried an annual burden of £5 billion due to the import of oil. Incidentally, since the Government took office 10 years ago, they have enjoyed £76 billion in oil revenues as a consequence of North sea production. On the latest available figures—I have not checked them—we consume more than 83 million tonnes of gas. That is equivalent to one third more than we produce, and the extra consumption will carry an import price.
I do not believe that the case has been made for treating nuclear power as a special case. The hon. Member for Bedfordshire, North made a valiant attempt to save the Electricity Bill, but the Opposition do not want the privatisation of electricity. We believe that the Bill is a monster and that it will make the consumer and the country suffer. I hope that when we decide what to do it will not be just a question of public ownership of the thermonuclear power industry but that we shall return to public ownership of energy and a policy and strategy that will benefit the people of this country.

Mr. Michael Stern: I am grateful for this opportunity to make a brief contribution to the debate. I shall not follow completely the arguments used by the hon. Member for Midlothian (Mr. Eadie). I was sorry that he chose to refer so slightingly to my hon. Friend the Member for Bristol, East (Mr. Sayeed) who comes to the debate as a naval engineer. I am sorry that the hon. Member for Midlothian had not researched that fact before he spoke as he did.
This debate is mainly about the best future for the nuclear component of the electricity industry. In the next few years, that component will undergo several startling changes. The first, on which we are already embarked, is the changeover in the principal method of production through nuclear means from the AGR to the PWR which, in itself, is a major change.
In addition, as the pace of change is accentuated—even in advance of the passage of this Bill—by the prospect of privatisation, even greater changes are taking place in the potential of the nuclear industry. The possibility of smaller PWRs and nuclear stations, designed to plug gaps rather than provide a base load, are being discussed for short-term use.
In recent weeks the physician's dream of the production of power by nuclear fusion has, hopefully, come one small step closer to reality. No doubt, as fusion becomes more of a possibility, its impact on the generation of electricity will become more marked.
I should like to refer briefly to a subject that I mentioned on Second Reading—the fact that the demands


on electricity generation throughout the world will, in a short time, be infinitely greater than we have ever been used to. The mere fact that we in this country—like most of the developed nations—use 15 times as much electricity per person as many parts of the developed world, which want to accelerate their standards of living to somewhere closer to ours, will mean that there will be a demand for vastly increased electricity generation.
Anyone who believes that such vastly increased electricity generation can possibly come from the burning of fossil fuels can only be someone who believes that human life is designed to grow in ever hotter greenhouses. If we are serious about wanting to assist the developing world to achieve a standard of living which we find acceptable, we can help them only through nuclear or renewable sources of energy. There is no other alternative available. In the next few years we shall demand from the nuclear section of the industry rapid changes, merely to meet the demands of the rest of the world.
The new clause gives us a simple choice. Tremendous demands for change will be made of this section of the industry. Is that industry more likely to respond rapidly to change if it is in the private or the public sector? I do not think that even Opposition Members would argue that if an industry is retained in the public sector it will have the impetus to change and develop.
If the nuclear sector is to develop in the way that will be demanded of it in the next few years, we must give it every incentive to be ready to meet that change. It will have to take its place in a market and be responsible to the forces of competition.
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A second argument for the nuclear industry to move into the private sector as quickly as possible concerns marketability. It has been said several times, not least by my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), that the nuclear industry will be difficult to market. I take exactly the opposite view. If we look at the various sections of the industry in terms of their attraction in a stock market issue, we find that we are looking at two rather different industries. The fossil fuel industry has a potential for high profit, but its profit can be greatly affected very quickly by environmental demands, regulatory demands of the EEC and the development of new and untried technologies such as the massive expansion of flue gas desulphurisation—or hopefully, at a later stage, fluidised bed combustion.
The non-nuclear end of the industry could be characterised, in marketing terms, as the sort of equity that would be very popular on the stock market among private investors but would carry high risk and high reward. The nuclear industry, as it exists at present, is a wholly different animal. Most of the costs that go into the profit equation in the nuclear industry have already been incurred: they are known. Therefore the nuclear section, particularly in its attraction for institutional investors, will be very much more in the nature of a gilt-edged stock. It is unlikely to show the same rapid changes in profitability as the non-nuclear industry; on the other hand, it is much more likely to produce a steady return for the investor.
I do not share the doubts of my hon. Friend the Member for Bedfordshire, North about the marketability of the nuclear section. I believe that it will appeal to a

different section of the stock market, but appeal it undoubtedly will. On the basis that the industry must be ready to respond to change, and that that can result only from its being exposed to the forces of competition and profitability—and on the basis that the industry will itself broaden the appeal of the overall privatisation of the electricity industry—I hope that the new clause will be defeated.

Dr. Kim Howells: In his proof of evidence to the Hinkley C public inquiry last October, Mr. F. P. Jenkin, on behalf of the CEGB, listed no fewer than 28 reactors—mainly Magnox—which had elected to be decommissioned in the next 12 years. The bulk, incidentally, are to be decommissioned by the mid-1990s. The likely costs of decommissioning, however, are as vague in 1989 as the various proposals so far announced for physically dismantling nuclear stations and disposing of their constituent parts.
The operators of nuclear power stations are required to make provision in advance for the cost of shutting them down, but a recent survey by the Financial Times energy economist suggests that they are planning that provision on the basis of very limited evidence, and that they are likely to find their funds insufficient to meet the actual cost. The utilities have recently calculated that cost on the basis of 10 per cent. to 20 per cent. of the cost of building a new station. With the cost of new reactor capacity running at around £1·2 billion per 1,000 MW, that conservative calculation represents a substantial sum. The SSEB, for example, estimates the cost of dismantling its two Hunsterston B reactors at £270 million in 1992 values.
If we give the utilities the benefit of the doubt and take, as an average per plant, a figure of just £200 million for decommissioning, the 20 reactor sites to be decommissioned by the year 2,001 will involve expenditures of no less than £4 billion. If, as is likely, the decommissioning cost is nearer £300 million per site, the global cost hovers around the £600 billion mark. It is little wonder that the majority of Government Members want to dump responsibility for that decommissioning in the lap of somebody else. But the responsibility cannot be dumped—the decommissioning process will affect us all, whether we like it or not, in the same way as we all share responsibility for the burning of hydrocarbons and for the detrimental effect on the environment of doing so without proper technological safeguards.
Some of the proposals for decommissioning nuclear power stations are barmy enough to make even the Secretary of State's hair curl. Recently, I read a paper by a group of West German nuclear engineers. It advocated that, once fuel rods had been taken from the reactor core, they should be replaced by high explosives, and that controlled explosions should take place in order that a new generation of robots might go into the reactor core, pick up the fragments of irradiated material, and drop them into little lead-lined sacks. The robots would then come out of the reactor. It would be dismantled in that fashion.
It seems to me that the industry simply has not thought this problem through. The Government are attempting to make sure that they get out of the situation so that they will not have to take responsibility for it. That is not good enough. They assume that they can substitute the effects of the free market—that, somehow, a magic wand will be waved and that everything will be all right once privatisation has taken place. I should like to draw the


attention of the Secretary of State to reports that the Chinese are negotiating for South African coal, despite the fact that British Coal is now the world's largest importer of Chinese anthracite because it closed down virtually all the anthracite mines in South Wales. The Chinese are so desperate for coal that they are willing to shop around and buy it from other countries at the same time as they export subsidised coal to break the coal industry of a potential customer—namely, us.
A free market in energy does not exist, and it never has existed. Energy has always been right in the cockpit of politics, and it always will be there whoever controls the sources of energy in the 21st century will have political power as well as economic power. It seems to me that the Government are trying to dump responsibility and make a fast buck. That is what it is about. To quote a former distinguished member of this House, we are selling the family silver for short-term gain. That is a disgrace—a disgrace in terms of safety, in terms of the health of our children in the future, and in terms of those children's inheritance of a sterilised coal industry.

Mr. Ian Bruce: I did not plan to speak, but I listened with great interest to information being abused by the Opposition and thought that I should say a few words about the rather strange notion of my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet)—for whom I have great respect—that somehow, by keeping the nuclear industry within government, we would be protecting the public and doing the best job for the nuclear industry.
We in this country started off with a Magnox programme. We built some 20 stations, every one of them different. So many of the decisions as to how we would build them, where we would build them, and the different equipment that would go into them were examples of Ministers putting their sticky fingers into decision-making. Of course, we know well what happened when there was a decision to be made under a Labour Government. The AGR technology was unproven; the pressurised water reactor technology was well proven, and was going through in the case of most of our competitors; and there was the steam-generating, heavy water reactor, in respect of which, I might point out, I have the honour of representing Winfrith, which had the only model of that type. We decided to go for the advanced gas-cooled reactor. We learned to our cost that that was a very expensive route to follow.
We toyed with fast breeder reactors, but we decided to soft-pedal on that type of reactor. I was surprised to hear the hon. Member for Midlothian (Mr. Eadie) say that Britain has no experience of pressurised water reactors. My hon. Friend the Member for Bristol, East (Mr. Sayeed) pointed out, having been in the Royal Navy, that we have built and run over 20 of those reactors and that we have done so extremely effectively. If an organisation decides to go down a particular technology route—as the Royal Navy did—and to stick with it, it can be most effective.
France adopted a technology and then refined it. By investing an amount equal to £20 billion, it is now able to provide the cheapest electricity in Europe.[Interruption.] No, Electricité de France is not in debt. Moreover, France is exporting electricity to this country, Germany and other countries. France generates more nuclear power than it needs.
We have suffered from constant changes, influenced by Government policy. That is why our nuclear industry is in such a mess. One wonders, therefore, why the South of Scotland electricity board has been so successful. It runs a small number of nuclear power stations. However, the board was sensible enough to look at other people's technology—for instance, at the CEGB's technology—and pick the winners when the bugs had been taken out of them. The SSEB's nuclear power programme provides cheap energy which has benefited Scottish industry.
The European sector of the Soviet Union is running out of cheap coal. It has made the decision—

Mr. Morgan: Perhaps I could correct what the hon. Gentleman said a few moments ago. Electricité de France has made a loss.Power in Europe of 30 March says:
EDF slipped back into the red last year.

Mr. Bruce: I stand corrected on that point, but that is only one year. After all the money that has been invested in the coal industry to ensure that bulk supplies of coal are produced for our electricity industry, it would be hard to argue that we are making a profit out of the energy industry.
The European sector of the Soviet Union has little cheap coal now available to it, so it has decided to build 36 large pressurised water reactors. The Soviet Union is asking Britain to help it to design safe pressurised water reactors.
Before the Secretary of State introduced his proposals, the CEGB said that nuclear energy was cheap. Many people have referred to the fact that before the break-up of the organisation was suggested the CEGB said that nuclear energy was cheaper than any other form of energy. By fair means or foul, it has now made sure that in the Bill the Secretary of State provides compensation if nuclear energy, when it is properly costed and put into the system, is found to be more expensive than other forms of energy. One can imagine why National Power has taken that view: it is the only organisation that currently has large-scale generation from nuclear power, and so it is looking for some guarantees from the Government. But I also understand why it has great problems with the way in which nuclear power is to be costed. We in this country have failed to make the decisions that we should have made on a number of matters, particularly on waste disposal.
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We were told some years ago by Nirex that the shallow burial of nuclear waste was a sensible, economic and safe means of keeping the waste out of harm's way. One must remember that this particular type of nuclear waste has been stored for 20 or 30 years in prefabricated asbestos or metal sheds above ground in encapsulated tubs, and that we have all felt very safe about that. Bradwell, which did not want a shallow nuclear dump, has had a shed filled with nuclear waste for years. I have one in Winfrith; anyone who has a nuclear power station has one of these sheds, where we have stored safely for up to 30 years intermediate and low-level waste.
Unfortunately, the Government have been pushed—possibly by people's fears, which have been whipped up by Opposition Members—[HON. MEMBERS: "Oh!"]—into proposing such an incredible solution as burying this type of waste under the sea.


We also have the problems of decommissioning. When Magnox stations were built, it was clear, before we built them, how they would be decommissioned: people would remove all the parts that could be removed, take out the very radioactive material—the fuel, and so on—which would be taken away for reprocessing, and the inside of the nuclear reactor, which would be only marginally radioactive, would be inside a large shield, purpose-built to keep it in, even when it contained very radioactive material, and would simply be buried in a hill. That is the cheapest and most sensible way of getting rid of a nuclear power station.
The amount of radioactive material left in a pressurised water reactor will be even less, and these reactors will be even easier to deal with. To want to break the reinforced concrete shielding at Sizewell, in order to take away a small amount of radioactive material when the life of the power station is at an end, is totally mad. Why not have the highest hill in Suffolk, simply by covering it over and leaving it? That is the best and cheapest way of getting rid of it.
Again, National Power will be worried about the costs of having to reprocess.

Mr. Eric Illsley: rose—

Mr. Bruce: I must get on.
It will be worried about reprocessing fuel that has no use. We have said in the past that we were reprocessing this fuel because we would run out of uranium which we would need for fast breeder reactors. The Government ought to look at what is to be done with the fuel. Magnox fuel needs to be reprocessed because it is unstable in its unreprocessed state, but the fuel from AGR and PWR reactors could be stored without reprocessing.
The Government must therefore look at the cost of waste disposal, the cost of decommissioning, and the cost of reprocessing and perhaps see that as the way to control the additional costs that may or may not come through in nuclear power. I believe that we have an opportunity to do something about costs while we are selling off this part of nuclear generation, because on-going costs of nuclear generation are lower than those of any other fuel; that is why they are left on as base load in all our power systems. By selling these power stations at a price that the market believes they are worth rather than at the cost of building them, one can get an economic cost for the operator to operate them at the price the shareholders paid for them rather than the price that the CEGB paid for them. In that way the market could decide the best economic rate for running the power stations.
New power stations will show on an economic basis that they can be cost effective. The two organisations currently licensed to run nuclear power stations—the Atomic Energy Authority and BNFL—are considering the possibility of going into partnership with private companies. That demonstrates graphically that when decisions are taken away from the monopoly supplier, the CEGB, other people want to get into nuclear power generation. I should be grateful if my right hon. Friend would address a few remarks to how he sees power stations being run effectively by the Atomic Energy Authority or BNFL if they eventually get into private hands.
With the use of present technology, the private approach will mean that nuclear power will be generated far more cost effectively than before. The same efficiency that the CEGB has demonstrated in running coal-fired stations, which provide 80 per cent. of its production, will be shown in a group of nuclear reactors which will have to come inevitably because we do not have an unlimited supply of coal. The economic cost of taking coal from the ground will get higher and higher, while the cost of nuclear energy will get lower and lower.

Mr. Hardy: I will try not to respond at length to the hon. Member for Dorset, South (Mr. Bruce) but some parts of his speech cannot pass unremarked. His was the first reference today to cheap French nuclear power. We have shown over the last three or four years, after listening to a succession of Conservative Members in previous energy debates making the same point, that it is unjustified. Electricité de France is the largest single corporate debtor in the world. It is sustained by the French Government because they are determined to ensure that it corners the market and supplies heavily supported nuclear power to keep French industry in a competitive condition.
The hon. Gentleman also referred to Polaris submarines. I thought that at one point he was about to suggest beaching them all in order to provide new little top-ups. If they were privatised as well, they could be used to serve the spot market in power stations, as was recommended in Committee.
I do not want to respond further to the hon. Gentleman although I think that his speech was the first of the penal sanctions that will be taken against the hon. Member for Bedfordshire, North (Sir T. Skeet). The hon. Member for Dorset, South gave the credit for the decision to reverse the Nirex clay bed burial proposal to the Opposition and not to the three Conservative Members who were instrumental in changing that decision just before the election.
I want to compliment my hon. Friends on their comments. My hon. Friend the Member for Pontypridd (Dr. Howells) echoed the Secretary of State's concern for priority for security of supply. The Secretary of State joined us only on rare occasions in Committee. He never finished a speech that I interrupted on a point of order before we finished one day. I do not think that we saw him in Committee after that. However, the Secretary of State is right to serve the priority of security of supply. The only difficulty is that he seems to see security only in the nuclear context. If he was really keen on security of supply, and if he was really in pursuit of diversification, the Government's record on energy efficiency would be more commendable. Our Government's record is the worst in the civilised world. The jobs which would have accrued had we copied the other countries of northern Europe would have made a substantial genuine contribution to reducing Britain's unemployment figures.
Some people believe that hon. Members who represent coalfield constituencies have only the interests of the coal industry at heart. Obviously I have. I am sponsored by the National Association of Colliery Overmen, Deputies and Shotfirers and I have a mining constituency, although it is much less a mining area than it was three years ago. There are more redundant miners in my constituency than there are people working in the coal industry. The number working in the industry is shrinking and could shrink to a dangerous level before long.
We must have diversity and give a higher priority to energy efficiency and conservation. At the same time, if the Secretary of State is sincere in his pursuit of security of supply, he must resist the blandishments of some of his hon. Friends and pay attention to that small band of Conservative Members who agree with our view and who are worried lest we develop a dependency on imported coal.
At present—the Under-Secretary of State knows this, even if he will not say so with the clarity that the situation requires—we are in a buyers' market in the world coal trade. But add 10 million tonnes, let alone 30 million tonnes, to the increased demand for coal in that market, and it will rapidly transform from a buyers' to a sellers' market, and I think I see the Under-Secretary nodding in agreement. That transformation could occur rapidly. Indeed, because of the antics of some people who cannot see further than the end of their noses, in the coming few years the British coal industry could be reduced to a tiny rump. Then we would not be able to meet our demand for coal and we would have to buy as world coal prices rise.
Today, world coal is available at $3, $5 or even more per tonne less than the cost of production at the colliery, before transport costs are incurred. It would be stupid for us to develop a reliance on imported coal while it is cheap, discounted and offered at a dumped price.
The action of the Government is not that of pure dogmatism. It is the action of an Administration who are worried about the level of trade deficit and international indebtedness. They believe that one answer to that problem—an answer which is also comfortable in a party political sense—is to rattle the begging bowls around the world and to dispose of an industry on the cheap, thereby creating problems, some of which we have mentioned in this debate, which the Secretary of State hopes will go away. If the right hon. Gentleman's first priority is security of supply, he cannot maintain the posture which dominates this part of the Bill.
I am glad that the hon. Member for Bedfordshire, North has provided us with an opportunity to discuss these issues. He appreciates, as do my hon. Friends and I, the way in which the research and development base in Britain is declining. He was right to express anxiety about that. Indeed, in 10 years time that may appear to have been the most important part of his speech. We are relying on others' research. Our nuclear programme demonstrates that we have turned our backs on some difficult and costly decisions. It seems to me that we are developing a dependency not merely on other people's research and other people's money but on other people's coal.

Mr. Geoffrey Lofthouse: Is my hon. Friend aware that Mr. Malcolm Edwards, giving evidence to the Select Committee on Energy, said that, because of the Government's refusal to find £11 million to continue the research and development of the fluidised bed at Grimethorpe, it may have to be discontinued? If that happens thare will be very little research and development into such schemes.

Mr. Hardy: I am delighted that my hon. Friend raised that point as it answers many of the comments that we have received from Conservative Back-Benchers. We are in favour of research and development in support of the environment for which the Prime Minister occasionally

expresses some sympathy. If that research were to founder, the Government would be acting with the most abject irresponsibility.
When Conservative Members spoke at their counts after the last general election, they did not merely thank the 25, 30 or 35 per cent. of their electorates that voted for them, but made the point that they would be representing all the people in their constituency. As that obligation exists for every individual Conservative Member, surely the Government must accept that their responsibility is national and is not merely to the City of London and to the affluent and favoured areas of these islands. They should understand that they have inflicted on many communities in coalfield areas, particularly in the past three or four years, dereliction and devastation, the dampening and destruction of hope, the slaughter of jobs, the depression of wage rates and the creation of an environment which, unless something is done very soon, will cause further dismay and destruction.
For example, we still await decisions about derelict land grant. For the Government to embark on a further round of job destruction and annihilation—[Interruption.] It is no good the hon. Member for Dorset, South (Mr. Bruce) smirking. These islands are too small for the regional differences which he views with equanimity. It is time that he understood that hon. Gentlemen representing areas as far from the coalfield as his constituency are beginning to worry about the differences between one part of the country and another which are daily being exacerbated.

Mr. Ian Bruce: Will the hon. Gentleman give way?

Mr. Hardy: No, I shall not give way. The hon. Gentleman spoke for a long time and uttered a lot of nonsense and is not going to interrupt my concentration.
These islands are small and while hon. Gentlemen can happily engage in short-term calculations with no long-term wisdom whatsoever, in importing coal and destroying our communities. it would be not merely injurious to the Secretary of State's first priority, which is security of supply, but that short-term folly would bring about utter destruction and injury to our constituents. If Conservative Members resent our making such points because we come from the coalfields, that does not mean that our arguments are unjust or invalid. Our arguments have a great deal more wisdom than some of the points raised by Conservative Members. It is certainly time that the Secretary of State recognised that enough damage has been done and that further risk should not be incurred.

Mr. Beith: I shall concentrate on what the Secretary of State said. First, I acquit him of the charge that he played no useful part in Committee. At least he was on the Committee, which is more than can be said of the Secretary of State for the Environment in respect of the Water Bill. The Secretary of State illuminated some of the contradictions in the Bill, sometimes deliberately and openly, sometimes by accident, but he made a valuable contribution to the Committee and I do not agree with the charge that he did not.
I also agree with the key aspect of the Secretary of State's analysis of the industry now. The present system is indefensible. It has allowed the industry, as a monopoly supplier, to make decisions about investment without any real regard for the return on the investtment or the cost to the consumer. The Labour party would have perpetuated that system in an even worse form. I have vivid


recollections of what it had in mind. It wanted to create a single nationalised monolithic industry under the leadership of Sir Francis Tombs, who has a greater reason than anyone not to vote for my party as it was I, with my late friend David Penhaligon and other colleagues, who refused to allow that proposal to pass during the Lib-Lab pact. Sir Francis Tombs thus never became the head of the single nationalised monolithic electricity industry that the Labour party preferred, although he has managed to carve out a lucrative career elsewhere. That system would have been even more damaging than the system that we now have. The current system has produced colossal excess capacity, especially in Scotland. The South of Scotland electricity board has more than double the capacity that it requires on the coldest day of the year.
The Secretary of State has failed to follow through his analysis in the shape that he is creating for the industry. He is in a ludicrous dilemma. He claims to be creating a market system for electricity while shielding nuclear power from that market. He is engaged in ensuring that shareholders do not take any risks. How can a market system work other than on the basis that shareholders have to take risks with their capital and are therefore concerned about the level of risk? The purpose of the Bill is to protect shareholders from any of the risks of investment in nuclear power. That is the contradiction at the heart of the matter.
The Minister referred to the two manifesto commitments that he and his colleagues made—to privatise electricity and to retain a substantial nuclear power industry. When they made those commitments they did not realise that they were incompatible. That discovery came later but the Minister and his colleagues decided to plough on and try to do both. They should have changed their minds and recognised, as we did long ago, that the protection and feather-bedding of the nuclear power industry is against the interests of the consumer.
The Minister criticised the investment decisions that were made in the past, but he and his colleagues did not oppose them at the time. When Labour Governments made crazy investment decisions, my hon. Friends and I were described, often by Labour Members, as the brown bread and sandals brigade because we objected to the absurdity of those decisions. Now the Minister, too, realises how absurd some of those decisions were, yet he has created a system in which such decisions can still be made—a system in which the disadvantages of nuclear power will be paid for by the consumers without any choice on their part. There is a higher cost and an incalculable level of risk involved in nuclear power. We all know that, although the risks of nuclear power are statistically smaller in incidence, they are incalculably greater in terms of the character of what is involved, as we all saw in the Chernobyl incident.
I shall not go into the many other problems with nuclear power, but one pressing problem that has been pointed out in some of the speeches today is the dependence on the creation of more green field site nuclear power stations. They are then sterilised for 100 years, for the reasons given by the hon. Member for Dorset, South (Mr. Bruce). All that is built into the Government's privatisation plan instead of being exposed to the market considerations to which they attach such importance.
When the Secretary of State talks about diversity of supply, why does he not look at the energy efficiency and energy conservation side of the problem? It is argued that the amount of expenditure involved in building one pressurised water reactor would yield many times that saving in output if it were invested in energy efficiency and energy conservation. If there is a danger that we may have insufficient power in certain circumstances, such as those of the millers' strike which the Minister described, we could take the precaution of investing in more efficient use of power and less use of power in some areas in which we are profligate with it now.
The Secretary of State sought to argue that the Government were being open about nuclear power and bringing about a situation in which we could make real choices, but I am profoundly worried about what will happen at future public inquiries on nuclear power stations, such as could take place in my own constituency because of the Druridge bay proposals. It will be argued that all the planning considerations must be swept aside because Parliament has decreed that there has to be a non-fossil fuel quota, so we have to have that and other nuclear power stations. There will be a distortion of the decisions in which local communities seek to be involved as they argue the case against nuclear power. We have seen signs of that already at the Hinkley Point inquiry and the provision may prove to be the destruction of future public inquiries into nuclear power.
The hon. Member for Bedfordshire, North (Sir T. Skeet) has gone to the heart of the illogicality of the Bill, arguing cogently that, if nuclear power is to be ring-fenced and singled out, as he wants it to be, it should remain in the public sector at least for the time being. I do not want it to be ring-fenced and protected, but I accept the logic of his argument—that if that is to be so, the place for the industry is with the Government, who are imposing all these conditions to protect it. It is significant that the examples produced by Conservative Members of the new interest in diversified nuclear power generation came from the public sector. They were drawn from the Atomic Energy Authority and British Nuclear Fuels plc, both of which have shown interest in nuclear power generation and both of which are in the public sector. As public sector bodies, they are putting forward such proposals on the basis that they would have a guaranteed return.

Mr. Ian Bruce: The reason why the Atomic Energy Authority wants to go ahead with research into a small, integrated reactor is that private enterprise, not the Government, will provide the funds to carry out that research and build that power station.

Mr. Beith: That is only because its shareholders will be protected to the ludicrous extent provided in the Bill. It is as though a Government about to introduce a breathalyser announced widely that a previously unknown device was to be required by police forces all over the country and that any company which decided to manufacture them would have its shareholders protected from any risk that its particular version would go wrong. The Government are creating the market and protecting the shareholders who go into it. That cannot make sense by the Government's own standards, and it makes no sense by ours.

Mr. Alan W. Williams: I want to outline some of my criticisms. I support the proposal to keep nuclear power in the public sector and my main concern is


with nuclear safety. Since Chernobyl, the British public has become aware that nuclear reactors can go badly wrong and completely out of control. In the 1960s and 1970s the industry used to argue that so many fail-safe systems were installed in reactors that they could not go out of control. But they can and not merely once in every 1 million or 1,000 million reactor years, as the industry would have us believe.
We have had two major catastrophes, at Three Mile Island and Chernobyl, in 3,000 reactor years of experience. The statistics show that reactors will go wrong once every 1,500 reactor years. That means that if we build a pressurised water reactor with a design lifetime of 40 years at Hinkley Point, there is a one in 40 chance that it will become a Chernobyl or a Three Mile Island—and that goes for every pressurised water reactor that we build. The safety of nuclear reactors must be paramount and I am certain that the British public feel that they will be run more safely in the public sector than in private ownership, where a profit will be sought.
Once the industry is privatised, there is no question but that de-manning will follow. There will be pressure to cut the number of staff. Curiously, nuclear power stations are labour-intensive. For the same power output, nuclear power stations employ twice the number of staff of fossil-fuel power stations. Therefore, the pressure to shed staff will be all the more severe in nuclear power stations and that must mean compromises on safety.
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I shall be brief because of the time, but I too have strong reservations about decommissioning, nuclear waste and about the fate of the plutonium recovered by reprocessing. With decommissioning, we are talking about a time scale of 100 years or more. When we remember the time scale it strikes me as irresponsible to hand to private industry the important task of decommissioning.
The same goes for nuclear wastes, which we must keep from the environment, not for 100 years but for hundreds of thousands of years. Again, it is the height of irresponsibility to pass the safeguarding of such wastes to the private sector. Under the Bill plutonium will become private property. About 20 tonnes of plutonium will be handed over to private companies.
I turn now to economics and echo some of the points made earlier by the hon. Member for Bedfordshire, North (Sir T. Skeet) when he moved his new clause. What exactly will National Power be buying when it buys the nuclear industry? Well, it will be buying 10 Magnox reactors and five advanced gas-cooled reactors. That is the bargain. Of the 10 Magnox reactors, Berkeley is already closed, Hunterston is due for closure and the other eight will all be closed during the 1990s. The Magnox reactors are a fleet of old crocks. That is what is being sold off.
We heard the Secretary of State himself make critical comments on the AGR programme. Dungeness is a legend on its own. It took over 20 years to build. Three of the other five AGRs are clearly performing poorly. They are lame duck reactors.
The proposal to build four PWRs is a speculative venture because they are large reactors and their future economics is uncertain. The City of London knows that nuclear power is uneconomic. The figures that we received in Standing Committee from John Baker of the CEGB

showed that at 5p per unit nuclear electricity is 40 per cent. more expensive than electricity from coal at 3·5 pence per unit.
It is clear that nuclear power is the Achilles heel of the Bill. There is the danger that, in the flotation, the distribution companies and PowerGen may go all right, but that National Power, with its 20 per cent. nuclear component, may be unmarketable.
I ask my hon. Friends to support the new clause tabled by the hon. Member for Bedfordshire, North and I hope that he will also receive a lot of support from his own party.
Finally, I should like to draw attention to the document that we have all received today from the Confederation of British Industry. It is rare that I support anything from the CBI but, for different reasons, on this issue we are in agreement. Safety is the paramount issue to the general public and I believe that privatising nuclear power stations is irresponsible purely on safety grounds.

Mr. David Tredinnick: My remarks will be brief, as time is pressing on. I have attended most of the debate.
I cannot support the new clause. It is logical and desirable to include the nuclear industry in the privatisation measure now. I want the industry to be privatised in its entirety at once. It is quite right to do so. It is right also to have a non-fossil fuel obligation, with 15 to 20 per cent. generation coming principally from nuclear power. We cannot risk one supply of energy holding us to ransom. That occurred during two long strikes.
The significant point about the non-fossil fuel obligation is that provision has been made by my right hon. Friend the Secretary of State for renewable sources of energy. I look forward to renewable sources being part of that non-fossil fuel obligation.
I support also the non-fossil fuel levy. For the first time, the cost of generating electricity from different fuel sources will be crystal clear for all to see. That is a great step forward. It is vital to share any additional nuclear costs between the area boards. It is quite right for my right hon. Friend to stipulate that.
There was much talk in Committee about the so-called future nuclear levy. That is absurd as consumers are already paying for nuclear power through the current electricity pricing structure. Of course, customers have been paying a coal levy for over 30 years, as the CEGB has been paying over the market price for British coal. The Opposition cannot escape that fact.

Mr. Martin Redmond: Will the hon. Gentleman give way?

Mr. Tredinnick: I will not give way.
It is vital that the nuclear industry is privatised now, particularly as we move towards 1992, when the single European market will be with us. We will have a more efficient nuclear industry, and that will be better for consumers, the country and for all of us.

Mr. Ieuan Wyn Jones (Ynys MÔn): This has been art extremely wide-ranging debate.[Interruption.] I remind hon. Members that I have been present for most of the debate, and I have listened carefully to all the arguments that have been advanced. I even listened carefully to the excellent speech of the hon. Member for Bassetlaw (Mr. Ashton). There has been little support by Conservative


Members for the new clause which was put down by the hon. Member for Bedfordshire, North (Sir T. Skeet). I listened carefully also to what he had to say.
There is one matter which I should like the Secretary of State to clarify. He made it clear that the Government have an unqualified commitment to build four new PWR stations. I assume that he is prepared to assure the House that that is subject to the normal planning inquiries. I ask him to confirm that there will be public inquiries into the proposals. As he is aware, there is a proposal to build a nuclear power station in my constituency. My constituents would welcome an assurance tonight.
I shall concentrate briefly on the consequences of privatisation for jobs in the nuclear sector. It has already been said that privatisation has consequences for jobs. It is clear that, in putting forward its plans for a nuclear power station in my constituency, the CEGB stressed the economic benefits in terms of jobs and investment that will occur. Irrespective of the arguments for or against nuclear power, the CEGB knows that the only way that it can persuade people in my constituency to support that proposal is on economic grounds—jobs, infrastructure and investment. There remain a number of question marks about that commitment, because already in readiness for privatisation there are changes in the working structures within the Magnox station in my constituency. There is a shift away from full-time maintenance staff to contractors, many of whom come from outside the area.
When the CEGB announced that there would be an application for a nuclear power station in my constituency, we were told that at the height of the building programme 3,500 jobs would be created. That was dangled as a carrot in front of the people who would consider the planning application. Consequently, the CEGB considered that that should have been sufficient for us to accept the building of a nuclear power station. However, the problem is that the CEGB says that only half of those temporary jobs—1,750—will be created locally. It is clear that people within the county of Gwynedd would be capable of undertaking the task, but the CEGB is not prepared to give them the opportunity. That is irrespective of the argument for or against nuclear power.
The privatisation programme is making it impossible for the CEGB to overcome the problems presented by the economic case. My constituents feel very much like pawns in the game. They wonder whether the indemnity given to nuclear power under the Bill will be a temporary commitment that will allow National Power to build those nuclear power stations or whether it will be a continuing one. There will not only be the initial investment and the building costs, but there will be ongoing costs for at least 20 years during the useful life of a nuclear power station and the decommissioning costs at the end. That is why I believe that there are great dangers involved in privatising the industry and why I believe that the House should support the new clause.

Mr. Parkinson: I shall be brief, but I feel that I owe it to the House to reply to a number of specific points. I am glad to see that the hon. Member for Bassetlaw (Mr. Ashton) is back in his place, because I wanted to deal with his point about West Burton power station.
As a result of the Bill, the obligation to supply is being switched from the Central Electricity Generating Board

—the generator—to the area boards. That means that in future the generating companies will be able to build power stations only if they can find a customer for the electricity. In the past, because they had the obligation to supply, they decided on the technology, the site and the size. If it turned out that they had over-estimated and that the industry did not need the power station, we still paid. In future, they will be able to build a power station only if they can find a customer for the electricity. I believe that at present they are negotiating with the area boards to seee if they will buy the electricity that West Burton could produce. This is an inevitable consequence of the change in the obligation to supply. If the hon. Member for Bassetlaw would like to discuss it with me, as he suggested, I should be happy to meet him.
The hon. Member for Pontypridd (Dr. Howells), in a very good speech, the hon. Member for Wentworth (Mr. Hardy) and the hon. Member for Midlothian (Mr. Eadie) made the point that, because there is a non-fossil fuel obligation, that is evidence of an anti-coal attitude. We do not regard it as any such thing. The non-fossil fuel obligation will fix the level of electricity from nuclear sources at exactly the same level as at present—15 to 20 per cent. of the market. That means that 80 to 85 per cent. of the market will be supplied from fossil fuel sources.
In future, coal has the same possibilities as it has now. The difference will be that the generators will be able to buy their coal where they will. As the hon. Member for Wentworth has said, however, if a major purchaser went into the fairly small international market for steam coal, that would have a spectacular effect on prices. We believe that the prospects are extremely good for the British coal industry.

Mr. Hardy: I am grateful to the right hon. Gentleman for that comment, but does he accept that some overseas suppliers will be prepared to face a continuing loss to ensure the destruction of British capacity?

Mr. Parkinson: A number of things work in favour of the British coal industry: first, its location; secondly, the fact that it is extremely well equipped; and, thirdly, the facilities do not exist to handle huge imports of coal. For those reasons, the market is open to British coal and I believe that it will supply a substantial part of the market.
11.15 pm
The hon. Member for Carmarthen (Mr. Williams) talked about safety and is worried that the industry will be less safe in the private sector. The safety standards will not be relaxed. The nuclear inspectorate is an independent body, and it will supervise the industry as it does now. There will be no change in the codes of safety, the standards expected or the supervision of them. The hon. Gentleman mentioned the two major incidents at Three Mile Island and Chernobyl. Three Mile Island was a privately owned power station and Chernobyl was state owned. It is a question not of who owns a power station, but of how it is built, supervised and operated. Standards will be enforced as rigorously in the private sector as they would be in the public sector.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) mentioned planning and suggested that, in future, things will be much easier for those who wish to build nuclear power stations. I do not see that happening. Perhaps we will reach the stage where every application for a nuclear power station will not result in a debate on


whether we should have nuclear power. However, whether the location suggested is correct and whether the technology used is correct will still need to be settled. If there is a demand for a public inquiry—the hon. Gentleman knows how such inquiries come about—it must be held. The legislation will not short-circuit the planning system as suggested by the hon. Member for Ynys MÔn (Mr. Jones).
The Government have no plans to build any nuclear power stations. We are planning to get out of the business of being responsible for the building of power stations. The non-fossil fuel obligation means that we shall need about four PWRs if we are to continue with the same level of electricity generated from nuclear power. Where they will be and what they will be is a matter for the generating companies that apply to build them. There will be no short-circuiting of the planning system, which must be followed properly.
I made a long speech earlier tonight and I have attempted to answer some of the points raised since I spoke. I conclude by thanking my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet) for the way in which he moved his new clause. He did so in an interesting, almost intimidating, fashion, and it is a disappointment to me that I have to advise my right hon. and hon. Friends to vote against him. I am only sorry that I am unable to accept the new clause, and I hope that my hon. Friend will not feel too lost as he goes into the other Lobby with Opposition Members.

Mr. Barron: We heard the thanks of the Secretary of State to the hon. Member for Bedfordshire, North (Sir T. Skeet) for his earlier speech on new clause 3, which will no doubt be repeated during the next 12 months or more, prior to the flotation of the electricity industry, if the Bill becomes an Act. It is ironic in many ways that they seem to be on the same side, while both purporting to be major exponents of the nuclear power industry in their different ways.
The speech of the hon. Member for Bedfordshire, North was enjoyed by hon. Members from both sides of the House, but perhaps a little more quietly by Conservative Members than Opposition Members. It will probably go down as a memorable speech, although perhaps not as memorable as the speech mentioned by my hon. Friend the Member for Pontypridd (Dr. Howells), which was made in the other House a few years ago, and which mentioned the selling of the family silver. I cannot remember what position the hon. Member for Bedfordshire, North took on that matter at the time but I think we can see what his position is on the selling of the family plutonium. He appears to be against that, and to wish it could be kept in the public sector.
We discussed the nuclear levy at some length in Committee, and highlighted the effect that it would have on consumers' bills. An amendment was tabled by the Opposition but was fortunately defeated. In that debate the Minister said that he would not accept the amendment because National Power would publish separate, full accounts for its nuclear business when it publishes its main accounts. Most people do not see the accounts of businesses such as National Power unless they are politicians, have a vested interest, or perhaps know a local librarian who is interested in them.
Earlier today the Secretary of State said that the cost of nuclear power would be transparent and that the

transparency would, apparently, go no further at this stage than the annual accounts, of National Power. There is no doubt that new clause 16 would involve much more than the national accounts, of National Power, which we assume will be published annually. Without being able to see those accounts most people will be unable to see how uneconomic the nuclear industry is at present. Without the protection afforded to the nuclear industry by the Bill, I and many others are sure that consumers and producers would resist the nuclear industry, and would, instead, concentrate more on debates about developing our resources for renewable energy.
I was pleased that the Secretary of State said that the non-fossil fuel obligation of between 15 per cent. and 20 per cent. would be highlighted. We shall watch with great interest to see what percentage the Government believe that they should aim for. We shall also watch how much research and development the Government put into that area to ensure that targets set are feasible.
I should also like to see the developing and sustaining of the British coal industry—more so within a national and rational energy policy, which is now absent. At this stage, the Government seem prepared to plan energy in terms of nuclear and some small renewables, but not in terms of the rest of the country. We are firmly against that and believe that it highlights a great contradiction in the Government's flotation of the electricity industry. The Government have obviously failed to convince many people in the country that selling off the nuclear power industry is in their interests. We shall wait to see what happens to it when we come closer to the flotation date.
The nuclear levy is another tactic for sustaining the industry. We have been told that while nuclear power might be more expensive now—an admission that has come only in the past 18 months—we must wait because in the future it may seem better when compared to fossil fuel.
In October 1987, when the matter first came to light, Lord Marshall spoke of "jam tomorrow". The Minister has said that if nuclear power were "transparent", as the Secretary of State would wish—and as I would wish even more strongly—10 per cent. on our domestic electricity bills would be shown to be due to it. The CEGB's forecast, which has been highlighted by Opposition Members,, suggests that the PWRs at Sizewell and at Hinkley, one of which is under construction, will for the foreseeable future also be more expensive than coal. Consumers have been offered not jam today or jam tomorrow, but, perhaps, no jam at all.
The Secretary of State argued for diversity as the basis for security of supply. Can he picture someone sitting at home, eating a meal cooked on an electric cooker, watching television or perhaps listening to music on the radio? How many people using consumer goods at home wonder how much electricity for them has come from nuclear fuel, how much from renewable fuel and how much from fossil fuel—coal, oil or gas? It is nonsense to suggest that people are concerned about diversity. What people are concerned about is security of supply. The other thing that concerns them is cost—and, as I have said, what the Bill offers is not jam today, tomorrow or in the foreseeable future, but extra costs on electricity bills from nuclear generation.
The Secretary of State told the Committee:
diversity may have its price. We are prepared to identify, and justify, that price."—[Official Report, Standing Committee E, 7 February 1989; c. 736.]


Many Opposition Members feel that the Government have not done that. We cannot see how diversity can be used as a justification for putting up electricity prices now.
The Secretary of State also said in Committee that the cost of coal was a secondary consideration for the CEGB. The right hon. Gentleman knows better than anyone that in 1986, after the fall in the oil price, British Coal immediately lowered it price to the CEGB, which it has consistently done since then. In real terms, the cost of British coal to the electricity industry has been reduced. It is not the burden that hon. Members have described.
That price is an important consideration can be seen from the offer made by British Coal to the new generating companies—long-term contracts below or within the RPI for the next five or 10 years. That offer has been made nowhere else. In the past 12 months there has been a reduction in the coal price of some 30 per cent. in real dollar terms, and that is likely to continue. Everyone knows that if the new generators went on to the market now there would be colossal balance of payments problems, and also an increase in world coal prices. That is not an option for Britain at this time.
My hon. Friend the Member for Bassetlaw (Mr. Ashton) mentioned the Humber ports. Today we have seen for the first time the report from the Committee on the Associated British Ports (No. 2) Bill. In what, as the Secretary of State knows, is a preamble to its decision, the Committee says:
In our view it is the Government's duty to take whatever steps are necessary, in the overall national interest, to protect the indigenous coal-mining industry.
That is what we hope that the Minister will do. Rather than merely speaking at the Dispatch Box, we want him to make sure that there is as much protection for the British coal industry as there has been for the nuclear industry.
11.30 pm
The Secretary of State for Energy said earlier today that his party had been elected on a commitment to maintain nuclear power. He got it nearly right: his party was elected on this commitment, but the Conservative party campaign guide for 1987 said:
More nuclear power means that the rise in demand for electricity can be met cheaply and effectively",
and the Conservative manifesto of 1987 said:
We intend to go on playing a leading role in the task of developing abundant, low-cost supplies of nuclear electricity".
Neither of those got it right, as might have been clear for the last 30 years if there had been the transparency for which the Secretary of State now argues.
What the Government have been saying is commonly not the case. There is a central contradiction in what the Government stand for in relation to privatisation. They will feather-bed the nuclear industry, whether in respect of decommissioning, day-to-day running, or investment in the new PWRs. In Committee the Secretary of State said of the nuclear industry:
If there is a price to pay, we are prepared to pay it."— [Official Report, Standing Committee E, 7 February 1989; c 738.]
Well, we in the Opposition believe that that price is one that the nation cannot afford, and we will oppose this sale.

Sir. Trevor Skeet: We have had a good debate. This is a major issue, and I think the House should divide.

Question put, That the clause be read a Second time.

The House divided: Ayes 199, Noes 254.

Division No. 141]
[11.31 pm


AYES


Abbott, Ms Diane
Fisher, Mark


Adams, Allen (Paisley N)
Flannery, Martin


Allen, Graham
Flynn, Paul


Alton, David
Foot, Rt Hon Michael


Archer, Rt Hon Peter
Foster, Derek


Armstrong, Hilary
Foulkes, George


Ashdown, Rt Hon Paddy
Fraser, John


Ashton, Joe
Fyfe, Maria


Banks, Tony (Newham NW)
Galbraith, Sam


Barnes, Harry (Derbyshire NE)
Garrett, John (Norwich South)


Barnes, Mrs Rosie (Greenwich)
Garrett, Ted (Wallsend)


Barron, Kevin
Gilbert, Rt Hon Dr John


Battle, John
Godman, Dr Norman A.


Beckett, Margaret
Golding, Mrs Llin


Beith, A. J.
Gould, Bryan


Bell, Stuart
Graham, Thomas


Benn, Rt Hon Tony
Grant, Bernie (Tottenham)


Bennett, A. F. (D'nt'n &amp; R'dish)
Griffiths, Nigel (Edinburgh S)


Bermingham, Gerald
Griffiths, Win (Bridgend)


Bidwell, Sydney
Grocott, Bruce


Blair, Tony
Hardy, Peter


Blunkett, David
Harman, Ms Harriet


Boateng, Paul
Haynes, Frank


Boyes, Roland
Henderson, Doug


Bradley, Keith
Hinchliffe, David


Bray, Dr Jeremy
Hogg, N. (C'nauld &amp; Kilsyth)


Brown, Gordon (D'mline E)
Home Robertson, John


Brown, Nicholas (Newcastle E)
Hood, Jimmy


Brown, Ron (Edinburgh Leith)
Howarth, George (Knowsley N)


Bruce, Malcolm (Gordon)
Howells, Dr. Kim (Pontypridd)


Buchan, Norman
Hoyle, Doug


Buckley, George J.
Hughes, John (Coventry NE)


Caborn, Richard
Hughes, Robert (Aberdeen N)


Callaghan, Jim
Hughes, Sean (Knowsley S)


Campbell, Menzies (Fife NE)
Hughes, Simon (Southwark)


Campbell, Ron (Blyth Valley)
Illsley, Eric


Campbell-Savours, D. N.
Ingram, Adam


Canavan, Dennis
Janner, Greville


Carlile, Alex (Mont'g)
Jones, Barry (Alyn &amp; Deeside)


Cartwright, John
Jones, Ieuan (Ynys MÔn)


Clark, Dr David (S Shields)
Jones, Martyn (Clwyd S W)


Clarke, Tom (Monklands W)
Kennedy, Charles


Clay, Bob
Kilfedder, James


Clelland, David
Kinnock, Rt Hon Neil


Clwyd, Mrs Ann
Kirkwood, Archy


Cohen, Harry
Lambie, David


Coleman, Donald
Leighton, Ron


Cook, Robin (Livingston)
Lewis, Terry


Corbett, Robin
Litherland, Robert


Corbyn, Jeremy
Livsey, Richard


Cousins, Jim
Lloyd, Tony (Stretford)


Crowther, Stan
Lofthouse, Geoffrey


Cryer, Bob
McAllion, John


Cummings, John
McAvoy, Thomas


Cunliffe, Lawrence
Macdonald, Calum A.


Cunningham, Dr John
McFall, John


Darling, Alistair
McKelvey, William


Davies, Rt Hon Denzil (Llanelli)
McLeish, Henry


Davies, Ron (Caerphilly)
McWilliam, John


Dewar, Donald
Madden, Max


Dixon, Don
Mahon, Mrs Alice


Doran, Frank
Marek, Dr John


Douglas, Dick
Marshall, David (Shettleston)


Duffy, A. E. P.
Marshall, Jim (Leicester S)


Dunnachie, Jimmy
Martlew, Eric


Dunwoody, Hon Mrs Gwyneth
Maxton, John


Eadie, Alexander
Meacher, Michael


Eastham, Ken
Meale, Alan


Evans, John (St Helens N)
Michie, Bill (Sheffield Heeley)


Ewing, Harry (Falkirk E)
Michie, Mrs Ray (Arg'l &amp; Bute)


Fatchett, Derek
Mitchell, Austin (G't Grimsby)


Faulds, Andrew
Moonie, Dr Lewis


Fearn, Ronald
Morgan, Rhodri


Field, Frank (Birkenhead)
Morley, Elliott






Mowlam, Marjorie
Smith, Andrew (Oxford E)


Mullin, Chris
Smith, C. (Isl'ton &amp; F'bury)


Murphy, Paul
Spearing, Nigel


O'Brien, William
Steel, Rt Hon David


Orme, Rt Hon Stanley
Steinberg, Gerry


Parry, Robert
Stott, Roger


Patchett, Terry
Strang, Gavin


Pike, Peter L.
Taylor, Mrs Ann (Dewsbury)


Powell, Ray (Ogmore)
Taylor, Matthew (Truro)


Prescott, John
Thompson, Jack (Wansbeck)


Quin, Ms Joyce
Turner, Dennis


Radice, Giles
Vaz, Keith


Randall, Stuart
Wall, Pat


Redmond, Martin
Wallace, James


Rees, Rt Hon Merlyn
Wardell, Gareth (Gower)


Reid, Dr John
Welsh, Michael (Doncaster N)


Richardson, Jo
Wigley, Dafydd


Roberts, Allan (Bootle)
Williams, Rt Hon Alan


Robertson, George
Williams, Alan W. (Carm'then)


Robinson, Geoffrey
Wilson, Brian


Rogers, Allan
Winnick, David


Rooker, Jeff
Worthington, Tony


Ross, Ernie (Dundee W)
Young, David (Bolton SE)


Ruddock, Joan



Sedgemore, Brian
Tellers for the Ayes:


Shore, Rt Hon Peter
Mr. Robert N. Wareing and Mr. Allen McKay.


Skeet, Sir Trevor



Skinner, Dennis





NOES


Adley, Robert
Conway, Derek


Aitken, Jonathan
Coombs, Anthony (Wyre F'rest)


Alison, Rt Hon Michael
Coombs, Simon (Swindon)


Allason, Rupert
Couchman, James


Amess, David
Cran, James


Amos, Alan
Currie, Mrs Edwina


Arnold, Jacques (Gravesham)
Curry, David


Aspinwall, Jack
Davis, David (Boothferry)


Atkins, Robert
Day, Stephen


Atkinson, David
Devlin, Tim


Baldry, Tony
Dicks, Terry


Banks, Robert (Harrogate)
Dorrell, Stephen


Batiste, Spencer
Douglas-Hamilton, Lord James


Beaumont-Dark, Anthony
Dover, Den


Bellingham, Henry
Dunn, Bob


Bendall, Vivian
Durant, Tony


Bennett, Nicholas (Pembroke)
Dykes, Hugh


Benyon, W.
Fallon, Michael


Bevan, David Gilroy
Favell, Tony


Blackburn, Dr John G.
Fenner, Dame Peggy


Blaker, Rt Hon Sir Peter
Field, Barry (Isle of Wight)


Boscawen, Hon Robert
Finsberg, Sir Geoffrey


Boswell, Tim
Fishburn, John Dudley


Bottomley, Peter
Fookes, Dame Janet


Bottomley, Mrs Virginia
Forman, Nigel


Bowden, A (Brighton K'pto'n)
Forsyth, Michael (Stirling)


Bowden, Gerald (Dulwich)
Forth, Eric


Boyson, Rt Hon Dr Sir Rhodes
Fox, Sir Marcus


Braine, Rt Hon Sir Bernard
Franks, Cecil


Brandon-Bravo, Martin
French, Douglas


Brazier, Julian
Gale, Roger


Bright, Graham
Garel-Jones, Tristan


Brooke, Rt Hon Peter
Gill, Christopher


Brown, Michael (Brigg &amp; Cl't's)
Goodlad, Alastair


Browne, John (Winchester)
Grant, Sir Anthony (CambsSW)


Bruce, Ian (Dorset South)
Grist, Ian


Buck, Sir Antony
Hamilton, Neil (Tatton)


Burns, Simon
Hampson, Dr Keith


Butcher, John
Hannam, John


Carlisle, John, (Luton N)
Hargreaves, A. (B'ham H'll Gr')


Carlisle, Kenneth (Lincoln)
Hargreaves, Ken (Hyndburn)


Carrington, Matthew
Harris, David


Carttiss, Michael
Haselhurst, Alan


Cash, William
Hayes, Jerry


Chapman, Sydney
Hayhoe, Rt Hon Sir Barney


Chope, Christopher
Hayward, Robert


Churchill, Mr
Hicks, Mrs Maureen (Wolv' NE)


Clark, Dr Michael (Rochford)
Higgins, Rt Hon Terence L.


Clark, Sir W. (Croydon S)
Hill, James


Clarke, Rt Hon K. (Rushcliffe)
Hind, Kenneth





Hogg, Hon Douglas (Gr'th'm)
Porter, David (Waveney)


Hordern, Sir Peter
Portillo, Michael


Howard, Michael
Powell, William (Corby)


Howarth, Alan (Strat'd-on-A)
Price, Sir David


Howarth, G. (Cannock &amp; B'wd)
Raison, Rt Hon Timothy


Howell, Rt Hon David (G'dford)
Rathbone, Tim


Howell, Ralph (North Norfolk)
Redwood, John


Hughes, Robert G. (Harrow W)
Renton, Tim


Hunt, David (Wirral W)
Rhodes James, Robert


Hunt, John (Ravensbourne)
Riddick, Graham


Irvine, Michael
Rifkind, Rt Hon Malcolm


Jack, Michael
Roberts, Wyn (Conwy)


Jackson, Robert
Rost, Peter


Janman, Tim
Rowe, Andrew


Johnson Smith, Sir Geoffrey
Rumbold, Mrs Angela


Jones, Robert B (Herts W)
Ryder, Richard


Jopling, Rt Hon Michael
Sainsbury, Hon Tim


Kellett-Bowman, Dame Elaine
Sayeed, Jonathan


Key, Robert
Shaw, David (Dover)


Kirkhope, Timothy
Shaw, Sir Giles (Pudsey)


Knapman, Roger
Shaw, Sir Michael (Scarb')


Knight, Greg (Derby North)
Shelton, Sir William


Knight, Dame Jill (Edgbaston)
Shephard, Mrs G. (Norfolk SW)


Knowles, Michael
Shepherd, Colin (Hereford)


Lamont, Rt Hon Norman
Smith, Sir Dudley (Warwick)


Lang, Ian
Soames, Hon Nicholas


Latham, Michael
Speed, Keith


Lawrence, Ivan
Speller, Tony


Lee, John (Pendle)
Spicer, Sir Jim (Dorset W)


Lennox-Boyd, Hon Mark
Spicer, Michael (S Worcs)


Lester, Jim (Broxtowe)
Squire, Robin


Lightbown, David
Stanbrook, Ivor


Lilley, Peter
Stanley, Rt Hon Sir John


Lloyd, Peter (Fareham)
Stern, Michael


Lord, Michael
Stevens, Lewis


Lyell, Sir Nicholas
Stewart, Allan (Eastwood)


Maclean, David
Stewart, Andy (Sherwood)


McLoughlin, Patrick
Stradling Thomas, Sir John


McNair-Wilson, Sir Michael
Sumberg, David


Madel, David
Summerson, Hugo


Malins, Humfrey
Taylor, Ian (Esher)


Mans, Keith
Taylor, John M (Solihull)


Maples, John
Temple-Morris, Peter


Marlow, Tony
Thompson, D. (Calder Valley)


Marshall, John (Hendon S)
Thompson, Patrick (Norwich N)


Martin, David (Portsmouth S)
Thorne, Neil


Mates, Michael
Thornton, Malcolm


Maxwell-Hyslop, Robin
Thurnham, Peter


Mellor, David
Townsend, Cyril D. (B'heath)


Meyer, Sir Anthony
Tracey, Richard


Miller, Sir Hal
Tredinnick, David


Mills, Iain
Trippier, David


Miscampbell, Norman
Trotter, Neville


Mitchell, Andrew (Gedling)
Twinn, Dr Ian


Mitchell, Sir David
Vaughan, Sir Gerard


Moate, Roger
Viggers, Peter


Montgomery, Sir Fergus
Waddington, Rt Hon David


Morris, M (N'hampton S)
Walden, George


Morrison, Sir Charles
Waller, Gary


Moss, Malcolm
Ward, John


Moynihan, Hon Colin
Warren, Kenneth


Mudd, David
Watts, John


Neale, Gerrard
Wells, Bowen


Needham, Richard
Wheeler, John


Nelson, Anthony
Whitney, Ray


Neubert, Michael
Widdecombe, Ann


Nicholls, Patrick
Wilkinson, John


Nicholson, Emma (Devon West)
Wilshire, David


Norris, Steve
Winterton, Mrs Ann


Onslow, Rt Hon Cranley
Winterton, Nicholas


Oppenheim, Phillip
Wolfson, Mark


Page, Richard
Wood, Timothy


Paice, James
Woodcock, Mike


Parkinson, Rt Hon Cecil
Yeo, Tim


Patnick, Irvine
Young, Sir George (Acton)


Patten, Chris (Bath)



Pattie, Rt Hon Sir Geoffrey
Tellers for the Noes:


Peacock, Mrs Elizabeth
Mr. David Heathcoat-Amory and Mr. Tom Sackville.


Porter, Barry (Wirral S)

Question accordingly negatived.

Further consideration of the Bill adjourned.—[Mr. Kenneth Carlisle.]

Bill, as amended (in the Standing Committee), to be further considered tomorrow.

Mr. Alan Williams: On a point of order, Mr. Deputy Speaker. You may have heard reports, but because of the duties you have been performing this evening you will not have had an opportunity to see for yourself. Therefore, we want to allow you time to consider this.
This evening, on television, there has been a series of reports of an interview by Sir Leon Brittan relating to the Westland affair. In it he said that the release of the Solicitor-General's letter was approved by Charles Powell, the relevant private secretary at No. 10, and by Mr. Bernard Ingham, the Prime Minister's press secretary and that there would have been no question of a release of that document without that express approval from No. 10.
Yet in his evidence, reported in the fourth report of the Select Committee on Defence—[Interruption.] I am sorry; Conservative Members must understand that we have rights in the House as well.[Interruption.] A majority of 100 does not constitute absolute rights to dictate what happens.
The fourth report of the Select Committee on Defence, said in paragraph 203:
Mr. Brittan told us that he had no discussion with anyone in No. 10 before the disclosure.
We have a clear conflict of evidence in which there may have been a serious injustice done to the House by Sir Leon and/or by the Prime Minister.
I understand, Mr. Deputy Speaker, that you cannot give us a ruling this evening on the most appropriate way in which we should proceed to inquire into it, but it is a matter of enormous severity, as you will understand. May I ask that tomorrow afternoon you or Mr. Speaker, at the appropriate time, give advice to the House on how to pursue the issue?

Mr. Ivan Lawrence: Further to the point of order, Mr. Deputy Speaker. Is it not a fact that that interview took place before Christmas, that it was not considered—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I do not think that the hon. and learned Gentleman should proceed to debate the matter. I recognise the importance that the right hon. Member for Swansea, West (Mr. Williams) attaches to what he has said to the House. If he believes that questions of privilege are involved, he knows that it is a matter on which he should write to Mr. Speaker. I shall in any event make sure that Mr. Speaker is aware of what has been said on this occasion.

Mr. Lawrence: May I be heard, Mr. Deputy Speaker, as you heard the right hon. Gentleman?

Mr. Deputy Speaker: Mr. Lawrence.

Mr. Lawrence: If it is a fact that that interview took place before Christmas and—

Mr. Deputy Speaker: Order. I thought that I had made it clear to the hon. and learned Gentleman that I was not prepared to allow a debate on what had been said. That is precisely what the hon. and learned Gentleman is seeking to embark upon.

WELSH GRAND COMMITTEE

Ordered,
That during the proceedings on the matter of Housing in Wales, the Welsh Grand Committee have leave to sit twice on the first day on which it shall meet, and that, notwithstanding the provisions of Standing Order No. 88 (Meetings of standing committees), the second such sitting shall not commence before Four o'clock nor continue after the Committee has considered the matter for two hours at that sitting.—[Mr. Kenneth Carlisle.]

Mr. David Curry: On a point of order, Mr. Deputy Speaker. Are you aware that the remarks made by Sir Leon in his broadcast are identical to those made in a debate in the House on 27—

Mr. Deputy Speaker: Order. Hon. Members do not listen to what I say. The hon. Gentleman is seeking to turn a point of order into a debate. I will not allow that to happen.

LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) BILL [LORDS]

Order for Second Reading read.

To be read a Second time tomorrow.

General Practitioners (Wales)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kenneth Carlisle.]

Mr. Gareth Wardell: I am grateful for this opportunity to draw attention to the difficulties inherent in the Government's proposals for the reform of the National Health Service. The proposals for general practice will have a crucial bearing on our primary health care. It is therefore important that they are the right policies, that they have the full backing and support of GPs and health professionals, and that they are policies which will carry the Health Service forward with enthusiasm and commitment into the next century.
From the representations that I received from GPs in west Glamorgan at a meeting on 29 March, from the Powys local medical committee and from letters that I have received from doctors, including hospital doctors, it would seem that consultation and negotiation about the White Paper "Working for Patients" and the GPs' contracts have a long way to go before they can be regarded as supportive of improvements in primary health care. The comments by the Secretary of State for Health that GPs are concerned only about their cheque books are cheap and nasty and say far more about his own values and attitudes to health care than about the average GP's concern about the best way of organising surgeries, clinics and work schedules. The projection of the right hon. Gentleman's priorities to his critics ill becomes his office and responsibilities.
Critics of the right hon. Gentleman's proposals are to be found in large numbers. Under the White Paper proposals, GPs are already concerned that their role, as it were, of an independent broker between patient and the other Health Service facilities will be undermined. At present, a patient consulting his GP can rely on the doctor to offer him a course of treatment of a referral determined only by the GP's expertise and the patient's interests. When a GP has the additional responsibility of providing treatment or referral at the cheapest option—not necessarily the most cost-effective in the long term—from the patient's viewpoint the GP is no longer independent in the same way. Public concern is already mounting and I predict that there will be many more public meetings in Wales similar to the one that Councillor Brian Ford, with the support of his local GPs, has arranged in Clydach on 21 April.
The stated aims of the proposals in the White Paper are that patients should have a new deal, more choice, higher standards of health care and better quality care. The effects of the proposed new contracts for GPs in practices outside major cities, especially in rural and semi-rural areas such as Wales, including parts of my constituency, will directly conflict with those aims. Patients will certainly have a new deal, but it will not be a better deal—they will have less choice, lower standards of health care and no better quality of care. It is ironic that a Government whose basic philosophy and lodestar is the belief that people respond only to incentives, especially financial incentives, cannot see that the new contracts comprise a series of positive disincentives to GPs to maintain and promote primary health care services.
For example, the targets that GPs must reach to be paid for immunisation programmes were set at 90 per cent.

Those were penal targets, penal because in England and Wales as a whole in 1987–88 the average take-up rates of immunisation for vaccines such as whooping cough and measles were 70 and 75 per cent. respectively. In Wales, take-up has traditionally been lower, at 62 and 65 per cent. respectively, and in west Glamorgan, which has been extremely resistant, take-up was an abysmal 51 per cent. for whooping cough and 57 per cent. for measles.
On 8 February 1988, from a parliamentary answer I received from the Parliamentary Under-Secretary of State for Wales about immunisation against measles, diptheria, whooping cough, tetanus and polio in each county in Wales, I note that only Powys, in relation only to diptheria, tetanus and polio, had immunisation take-up of over 90 per cent. Knowing that, and unable themselves to provide a solution, the Government expect individual GPs to meet targets that have never been reached. Even 80 per cent. has not been widely reached, even with the new triple vaccine, even in health-conscious mainly middle-class areas. If GPs respond to the financial incentive in the proposed contracts, they will not even attempt immunisation programmes but will divert their time and effort elsewhere.
Cervical cytology testing is another area of primary health care which will be seriously undermined. The target of 80 per cent. for testing women aged over 35 years at five-yearly intervals is, again, unrealistic and puts the onus on GPs to press their patients into treatment which, however clearly beneficial, too many women often do not want to contemplate. Not only is there the same financial incentive to GPs not to take on the hassle of chasing target women and the administrative workload of results and recall, but I find it petty in a particularly mean way for the Government to ignore the fact that many GPs already recognise best medical practice and test all sexually active women at three-yearly intervals, routinely and without payment. It ill becomes the Government not only to settle for targets which are less than best practice but to haggle like fishwives about targets of second-rate effectiveness which are supposed to be improving standards and quality of care.
The proposed switch of emphasis to capitation payments will do nothing to improve the choice, standard or quality of care. Linking a large proportion of GPs' pay merely with the number of patients on a list is not the progressive reform that the Secretary of State for Health claims. The policy of rewarding larger lists was abandoned as a discredited system in 1966 because it encouraged poor patient services. As lists have been reduced, GPs have improved and extended services, particularly in rural practices, and the Government cannot claim otherwise. Since 1966 there has also been an invaluable exchange of ideas between practices because GPs are not competing for patients. That is likely to be inhibited among some GPs.
Powys local medical committee has already told the Secretary of State for Health that the committee is appalled that his civil servants are completely lacking in knowledge about the way in which rural health care is organised. The practice of Dr Mark Vernon-Roberts in Scurlage in my constituency of Gower is typical of many.
As well as carrying out surgeries and branch surgery sessions and making home visits, which are extra-frequent and extra-time-consuming because of the distance, GPs also regularly and routinely visit nursing and residential homes, for which they are not paid. They hold ante-natal and baby clinics; they hold well women clinics,


undertaking breast examination, family planning services and blood pressure checks; and they hold well person clinics, undertaking general health examinations and influencing lifestyle risk factors. They also hold diabetic clinics and provide facilities for blood testing to save long and expensive trips to hospital, and they provide minor surgical and casualty services at the surgery and in local hospitals. In Powys, where there is no district general hospital, GPs are vital in keeping open community hospitals such as those at Newtown, Brecon and Ystradgynlais. In addition, they have prescribing and administrative functions.
It does not take a time and motion expert to appreciate that if a GP's pay is to depend on how many patients he has on his list, the standard and quality of care must deteriorate unless he discards some of his functions to take on more patients so as to keep his income up to today's levels or offers fewer services that he can afford to provide on a lower income from a lower list.
The financial incentive in the proposed contract in regard to capitation allowances is for GPs to take on more patients and reduce services so as to maximise income. The alternative is to merge practices to achieve economies of scale. The merging of practices can only reduce patient choice. When patients are ill they prefer to see a GP they know. Large practices work against that preference as they need to become highly organised and more bureaucratic. In my experience, bureaucracy and personal interaction conflict. The merging of practices is practical only in city areas. In rural and semi-rural areas it is not an option. Rural practices have traditionally been paid an extra capitation allowance to take account of the extra expenses arising from large areas and dispersed populations.
The Government propose additional capitation fees linked to a so far undisclosed population density in electoral wards. Electoral wards in rural areas are often very large and internally variable in density, so a rural doctor may find himself disqualified even though his practice area would easily meet the criteria. The question has to be asked—why abandon old and well-tested methods of distributing a fixed sum in favour of new and arbitrary ones?
Listening to the general practitioners, it is clear that in the negotiations which are still taking place the additional allowances must be seen as essential if the present level of care is to be maintained. Although there may be a redistribution of patients from one rural practice to another, it is unlikely that there will be an overall increase or decrease in the number of patients on an individual general practitioner's list. If one lives in or near a village or hamlet 10 or 20 miles from any sizeable town, with no public transport, no car or one car that the husband needs for work, and no chemist, one is glad to take the choice of general practitioners in the nearest practice and appreciate a branch surgery five miles away.
Rural practices will be particularly penalised by the capitation and rural capitation allowances proposals. They cannot obtain economies of scale. The Powys local medical committee reports that between 45 per cent. and 65 per cent. of a general practitioner's gross income is spent on staff wages, rent, rates, heating, telephones, administration and equipment for the services provided. Rural practices also operate branch surgeries for which the

general practitioner has to pay. If the income of practices is reduced under the terms of the proposed new contracts, it is inevitable that patient facilities at surgeries will be reduced and that more patients in rural areas will more frequently have to use or make expensive arrangements to travel to hospital for the care and treatment that could and should be available for them in their home or at the local surgery.
What is most likely to happen if rural general practitioners respond to the financial incentives in the new contract proposals as they stand is that, when a partner retires or leaves, he will not be replaced. With fewer general practitioners sharing the same number of patients, the remaining partners could maximise their income. The partners would be unlikely to take on a part-time colleague, most likely a women, because the capitation system works against part-timers almost to the point of discriminating against women. Fewer partners maintaining the same level of income into the practice to pay for extra services such as clinics, minor operations, casualty facilities and so on means a heavier work load for the remaining partners and, therefore, less time for each patient. It is a catch-22 situation.
There is another catch-22 for rural practice general practitioners—the new 20-hour rule. That is the number of hours a general practitioner must spend in the surgery each week. I have already outlined the many ways in which the role of rural general practitioners is much less centred on care in remote surgeries and, of necessity, far more geared to caring in the home and the community than the city practice with which the Secretary of State and his civil servants are more familiar. Rural general practitioners agree that the 20-hour rule would work against patients' interests in rural areas. It will do nothing to improve standards and quality of care. In fact, it will cause a deterioration in standards.
Rural general practitioners will lose out on another aspect of the new contracts. It seems possible that those who perform minor surgical operations in their surgeries will receive additional payments in recognition of that additional responsibility and the costs of providing staff and equipment for the facility. That should benefit rural general practitioners, who already undertake many such operations routinely. In comparison with their city colleagues, they save the National Health Service disproportionately more every time they perform such tasks, in terms of ambulance and hospital costs, patient care and convenience, by not referring patients to distant hospitals. However, it is just not practical and cost-efficient in the use of time for rural general practitioners to carry out at least five such procedures per session so that they can be paid for carrying out even one. The Secretary of State must look again at that aspect of the contract.
Many general practitioners are unhappy about the changes in the contract for the use of deputising services and 24-hour cover. The measure will also affect semi-rural areas where one practice covers for another, but will not affect rural practices which already cover for their partners. The exception is the single general practitioner practice. For the single practice general practitioner, the contract could be described as the death knell. All the problems inherent in the contract that I have outlined for general practitioners work against the one-practitioner practice. It seems that the Government regard such a practitioner as an anachronism, but those patients who


chose their general practitioner on the basis of continuing personal care from the same doctor for the whole family would not agree.
There are justified fears about the impact of the Government's proposals on the quality of patient care in primary health care. If we are really looking for policies that will enable general practitioner services to expand and develop the quality of care to patients—and not just to save money—the proposals are not only inadequate but deeply flawed. They are ill conceived and show that the Government are far removed from the real world and what is happening in general practice, especially in rural areas.
In articulating the points made to me by general practitioners, I have shown that their criticism stems from their interests in their patients' well-being. I have not found their interest and motivation in putting over their case to be purely financial. Rather they are concerned, from the real world of their practices, to ensure that what they have achieved in improving primary health care is not undermined by changes motivated only by the need to cut spending.
Since the first Black report in 1979, there has been a plethora of reports and research showing unacceptable levels of inequality in health in Britain. The Government have long paid lip service to the need to establish strong primary health care teams, led by general practitioners, to tackle endemic problems. The White Paper reforms and the proposed contracts for general practitioners provide an opportunity to implement long-needed changes. Instead, however, unless the Government are prepared to listen and negotiate on the basis of informed argument, we shall have yet another sector of fine public service sacrificed on the altar of cost cutting.
I trust that the Government will be prepared to listen and that meaningful negotiations will take place. I trust that the Under-Secretary will ensure that we do not regress to a Government preoccupation with list sizes as the criteria for good health care. I trust, on behalf of my constituents and of people throughout Wales and the rest of Britain, that rural health care will continue to be dictated by patient need, not by Government-determined, city-oriented economic efficiency.

The Parliamentary Under-Secretary of State for Wales (Mr. Ian Grist): I congratulate the hon. Member for Gower (Mr. Wardell) on being successful in the selection for the Adjournment debate. He spoke with the trenchancy that we have come to expect. I welcome the opportunity to reiterate the Government's position in respect of our proposals for the new contract for GPs. In particular, I want to correct some of the misunderstandings that appear to have arisen within the profession which the hon. Gentleman has adumbrated this evening. The hon. Gentleman has made a number of points about the contract and its specific effect on rural areas and in the time allowed or left I shall do my best to answer some of the points raised.
However, I want first to underline the crucial and central role of the GP in the Health Service. He or she is the linchpin of that service and the first and main point of contact for every citizen, and will remain so under our proposals.
I remind the House that the new contract proposals now under wide ranging discussion spring from our 1987

White Paper "Promoting Better Health" which contained the following objectives: to improve value for money, which includes wise as well as effective prescribing; to give patients the widest range of choice in obtaining high quality primary care services; to raise standards of care; to promote health and prevent illness; and to make services more responsive to the needs of the consumer. The new contract proposals set out the methods for achieving those objectives. I shall give just three examples.
First, we propose to introduce practice leaflets and annual reports for general medical practice. These will enable patients to be better informed about the services which are available to them so that they can make more informed decisions about their choice of doctors. This is an essential change if we are to make progress in informing the patient—as a consumer—of the services provided by doctors.
Secondly, the proposed incentive payments in respect of health promotion clinics, minor surgery, services to children and the elderly will shift health promotion and disease prevention to the very centre of primary care provision. That is vital if we are to use our resources to the best possible effect for patients.
Thirdly, the switch to capitation-linked payments means that a GP will have a strong incentive to sustain and develop service standards for patients.
I believe that these and the other measures that are implicit in the new contract will make a quite fundamental contribution to securing the future of primary health care services in this country. But, of course, we recognise that change—however positive—can be and clearly is unsettling. I know that GPs in rural practice have particular concerns, which I want to deal with now.
In the first place there has been some anxiety that rural practices might lose revenue due to the change from the present rural practice payment system to the basic practice allowance rural capitation supplement. Throughout our consideration of these matters we have had the particular circumstances of general practice in rural areas very much in mind. How could it be otherwise for those of us in Wales? To begin with we have to face the fact that the present rural practice payment system is poorly targeted. Payments are made relative to rural practice areas which were defined prior to the local government reorganisation on 1 April 1974. The hon. Gentleman will accept that in the intervening period, a number of areas have undergone considerable change—to put it mildly.
By contrast the proposed rural supplement will be simple to administer and monitor, better targeted, and constructed to provide adequate remuneration for GPs serving sparsely populated rural areas. The supplement will ensure that doctors are not disadvantaged under the new remuneration system because they practise in rural areas where the population density is lower than in towns. The supplement will be banded so that GPs working in areas of greater sparsity of population will receive proportionately more per patient. It is not intended that the supplement be related to work load. It is meant to assist in sustaining broad parity of earning capacity between doctors in rural areas and those in urban areas.
The hon. Gentleman suggested that the rural supplement would work against the consumer's interests because GPs might find it more difficult to look after patients living at some distance from the surgery than those in the same ward living nearby. But that is to ignore the effect of the increased emphasis on capitation, which


will encourage GPs to offer and maintain attractive services for all their patients wherever they live. Each patient will attract a standard capitation fee, plus extra basic practice allowance, if the GP's list is below 1,500, plus the rural supplement which, as I have said, will be pitched at a higher level in very sparsely populated areas.
Another way in which the situation of the rural practice will be recognised is through the weighting of our proposals for basic practice allowance capitation supplement. We appreciate that there are certain basic costs in running a practice irrespective of its size. So the BPA capitation supplement, which is payable for up to 1,500 patients per GP, is to be weighted in discrete stages for each group of 500 patients so that the supplement is highest for the first 500.
As the hon. Gentleman mentioned, many rural practitioners are concerned about the requirement in the new contract that 20 hours of surgery time will be given over five days. We shall reflect on the comments made about this, but I should just like to say two things. First, I was interested to read in Pulse, a medical journal, of 18 March that in a survey that it had undertaken no less than 82 per cent. of GPs already met the proposed requirement for 20 hours spread over at least five days. I mention that only as an indicator—no more—of what is being done already.
The second point is that a number of the GPs in rural areas are already providing a wide range of services in terms of clinics and minor surgery services. A number of them seem to be unaware that the time spent in clinics also counts towards the 20 hours. In addition, under our proposals, GPs will in future be paid a sessional fee for running clinics, and we also have proposals for minor surgery fees. I hope that the hon. Gentleman will support the view that it is right to reward those GPs who put in the effort to provide those much-needed services.
Two other matters of particular concern to rural practices which the hon. Gentleman raised concern our proposals for targets for child vaccination and immunisation, cervical cytology, and minor surgery sessions. In respect of targets for vaccination and immunisation which are in line with World Health Organisation recommendations, these proposals form part of our wider efforts to increase take-up and coverage—an objective which I am sure that doctors will wish to support.
Additionally, family practitioner committees and district health authorities are being encouraged to address those issues, for example by developing effective call-recall sytems and by making best use of staff in attaining high

levels of coverage in their areas. Obviously, there is a place for health education in this sphere, and I am sure that the health promotion authority for Wales will have its own contributions to make here in conjunction with health education within district health authorities. I am grateful for the comments made on these two matters, and I can assure the hon. Gentleman that serious consideration is being given to the views expressed by GPs and others.
I should like to take this opportunity to correct another misconception which has been mentioned to my officials during the Helpline telephone calls, and that is in respect of part-time GPs. Again, the hon. Gentleman raised that point. If he looks at page 18 of the contract, he will know what I am talking about.
It has been suggested that, under the 20 hours proposal, GPs on a part-time basis will no longer be employable. That is a misunderstanding of the proposals concerning job-sharing, part-time working and the so-called fractional doctors. GPs wishing to work part-time will still qualify for basic practice allowance capitation supplements, but at a reduced rate. Those doctors will continue to be principals in their own right, fully responsible for the patients on their lists but the BPA capitation supplement will need to be abated for fractional GPs to take account of the fact that their standing expenses will be lower than those of a full-time GP.
However, the abatement will be pitched at a level which will act as an incentive to flexible working. That should be particularly welcome to GPs with domestic commitments who wish to return to general practice on a part-time basis. I assure the hon. Gentleman that the Government remain committed to their objective of drawing more women doctors into general practice. They will be all the more valuable to practices if they offer one of the specialties for which we are introducing new fees—for example, minor surgery or child health surveillance.
I believe that the new contract will give the most powerful stimulus to enhancing the quality of patient care. The Government are whole-heartedly committed to the objective of helping the family doctor service to maintain and advance standards of practice. We aim to encourage GPs to provide the services that their patients want, and to ensure that those who offer a range of high quality services are properly rewarded. That will inevitably lead to an improved service for patients and a level of remuneration for doctors which will more accurately reflect their performance and commitment, which is the Government's commitment, to the National Health Service.

Question put and agreed to.

Adjourned accordingly at seventeen minutes past Twelve o'clock.